Doherty v. Bristol-Myers Squibb Co., No. 24-CV-06628 (MMG), 2025 WL 2774406 (S.D.N.Y. Sept. 29, 2025) (Judge Margaret M. Garnett).

The end of September marks the conclusion of another reporting period for the federal courts under the Civil Justice Reform Act, and thus this week’s edition is especially meaty. This made it difficult to highlight just one case, but we thought we would take this opportunity to discuss a decision that deepens the split in the district courts in one area of ERISA litigation – pension risk transfers.

As our regular readers know, older larger companies with traditional pension plans have increasingly been looking for ways to get rid of them. The advantages of doing so include removing the plans from the companies’ balance sheets, avoiding risk from market volatility, and reducing administrative duties. In the last fifteen years numerous companies, including IBM, Verizon, General Motors, and Ford, have offloaded pension plans through the use of pension risk transfers, or “PRTs.”

In these transactions, which are authorized by ERISA under 29 U.S.C. § 1341, a company effectively terminates the plan by transferring the plan assets to a third party, which then assumes the obligations of the plan by paying beneficiaries through annuities.

In a perfect world, nothing changes for the beneficiaries, who continue to receive their promised benefits. However, there are downsides. Because the plan has been terminated, beneficiaries are no longer entitled to ERISA’s protections. Furthermore, their benefits are no longer backstopped by the federal Pension Benefit Guaranty Corporation, and are instead protected by smaller state guaranty associations which often cap recoveries in the case of insolvencies.

One of the biggest players in the PRT market is Athene, a subsidiary of the private equity firm Apollo Global Management. Athene has aggressively pursued PRT deals and has been successful with Lockheed Martin, General Electric, AT&T, and the subject of this week’s notable decision, Bristol-Myers Squibb Company.

Bristol-Myers is a giant multinational pharmaceutical company valued at over $100 billion. In 2018 Bristol-Myers decided it would terminate its Retirement Income Plan, an ERISA-governed defined benefit pension plan. It hired State Street Global Advisors Trust Company to assist it in finding an annuity provider, and State Street recommended Athene.

Following State Street’s recommendation, Bristol-Myers offloaded the plan’s assets to Athene in two tranches in 2019. In sum, $2.6 billion in annuitized pension benefits were transferred. Bristol-Myers was able to retain “approximately $800 million in ‘surplus’ Plan assets after the transaction, which it used for other corporate purposes.”

The plaintiffs, Charles Doherty and Michael J. Noel, are former employees of Bristol-Myers and were participants in the plan. They brought this class action under ERISA against Bristol-Myers, the company’s pension and management committees, and State Street, alleging that Bristol-Myers “chose to pursue an annuitization of the Plan to increase its profits and offload its obligations to cover retirement benefits promised to its employees,” and “hired State Street to provide legal cover for an otherwise legally deficient annuitization process.”

As for State Street, plaintiffs alleged that it “recommended Athene as an annuity provider, not because it was the best option for Plan participants, but to bolster its business ties with Athene and with the private equity company Apollo Global Management[.]” The plaintiffs further alleged that Bristol-Myers chose Athene because it offered the cheapest option, which allowed Bristol-Myers to “capture additional surplus assets” upon plan termination.

Defendants moved to dismiss, contending that plaintiffs did not have Article III standing to assert their claims, among other arguments. The courts have split on this standing issue. Recently, in the cases involving General Electric and AT&T, the courts have accepted the defendants’ standing arguments and granted their motions to dismiss. (We covered the GE decision just last week, and see below for the AT&T decision (Piercy v. AT&T Inc.)).

Here, however, the court concluded that the plaintiffs “have shown Article III injury sufficient to confer standing.” Defendants contended that plaintiffs have not missed a benefit and thus they have suffered no harm from the PRT. However, plaintiffs alleged “there is a substantial risk that Athene will default,” thereby jeopardizing their benefits. In support, plaintiffs cited “a litany of allegations that speak to the dangers, volatility, and risks surrounding Athene’s fiscal health.” This included Athene’s “thin surpluses” (ranked 689 out of 695 carriers) and its status as a “risk-taking insurer” with “illiquid and volatile assets.”

Plaintiffs also highlighted Apollo’s ownership of Athene, stating that “private equity firms seek to maximize short term profit at the cost of long-term security,” and noting that “80% of Athene’s PRT ‘liabilities are reinsured through Bermuda-based affiliates owned by Apollo.’” As a result, “The Complaint as a whole sufficiently alleges that there is a substantial risk that Athene could default on its obligations and Plaintiffs will not receive their legally entitled benefits.”

The court further identified a separate basis for Article III standing, which was that the PRT diminished the value of their benefits. This was because “the Athene transaction ejected Plaintiffs from the ambit of ERISA.” Because ERISA no longer governs plaintiffs’ benefits, no fiduciary duties apply to Athene’s governance of those benefits, the Department of Labor can no longer monitor and regulate benefit administration, plaintiffs can no longer invoke ERISA’s rules or its civil enforcement scheme, and plaintiffs have lost the safety net provided by the PBGC, which is far superior to the backstop protections of state guaranty associations. This “diminution in value represents a tangible economic injury.”

In short, the court viewed it as “common sense” that retirees “have a strong interest in not only the amount of their monthly benefits but also the security of their monthly benefits.” Thus, they have a “concrete stake” in the dispute, even if their benefits have been so far uninterrupted.

The court then addressed each of plaintiffs’ claims for relief. On plaintiffs’ first claim, for breach of fiduciary duty, Bristol-Myers contended that pursuing a PRT is not a fiduciary act. However, the court noted that plaintiffs’ claim was not a challenge to Bristol-Myers’ decision to choose a PRT; it was a challenge to the transaction with Athene in particular. Thus, while “[d]eciding whether to terminate a plan is a sponsor function immune from ERISA liability…deciding how to terminate a plan is an administrator decision and therefore implicates ERISA’s fiduciary duties.”

As for State Street, the complaint alleged that it, “as a significant shareholder in Bristol-Myers…would directly benefit from a transaction that returned the maximum amount of Plan assets to Bristol-Myers to use for other corporate purposes.” This was sufficient to allege a violation of the duty of loyalty.

Plaintiffs also adequately alleged that State Street was imprudent in choosing Athene because they were exposed to greater financial danger. Plaintiffs asserted that Athene had a risky, less liquid investment portfolio, Athene was relatively inexperienced with PRTs at the time, and Athene had run afoul of New York regulatory authorities, among other facts. The court rejected State Street’s arguments on this issue, ruling that they raised factual issues that were not justiciable on a motion to dismiss, relied on documents outside the complaint, and cited to facts that post-dated the PRT and thus were of questionable relevance.

The defendants had more luck with their challenges to plaintiffs’ prohibited transaction claims. The court ruled that Athene was not a “party in interest” as defined by ERISA because Athene “merely sold products.” Furthermore, the court agreed with State Street that plaintiffs’ allegations regarding prohibited transactions between Bristol-Myers and the plan were countered by their allegations that plan assets were paid to Athene. Furthermore, to the extent Bristol-Myers received reverted plan assets, that payment was not a prohibited transaction because it was authorized by ERISA (under 29 U.S.C. § 1341(b)(3)(A)(i)).

These were minor victories, however. Defendants were unable to prevail with their strongest argument – Article III standing – and the case will now proceed.

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

Arbitration

D.C. Circuit

Holzman Horner, Chartered v. Valdez, No. 24-3483 (RJL), 2025 WL 2780065 (D.D.C. Sep. 30, 2025) (Judge Richard J. Leon). Plaintiff Holzman Horner, Chartered is a law firm specializing in Employee Stock Ownership Plans (“ESOPs”). In 2018, Aspen Electronics Manufacturing, Inc., created its ESOP. The ESOP identified three named fiduciaries: the Trustee, the Committee, and the Plan Administrator. At the time, the Trustee of the Aspen ESOP was A. Joseph Valdez, and the Plan Administrator was Giao Le, who was also the president of Aspen. A few years later, in 2021, Aspen was considering a potential sale of the company. It hired Holzman Horner to assist with the transaction. Mr. Valdez signed the agreement with Holzman Horner, and Aspen and the Aspen ESOP were named third-party payors and made jointly and severally liable for the payment of Holzman Horner’s legal fees. In addition, the engagement letter included an arbitration clause and arbitration agreement stating that Mr. Valdez “accept[ed] the agreement to arbitrate on behalf of [himself], and, to the maximum extent permitted by law, on behalf of (i) the ESOP, (ii) its current and future participants and their beneficiaries and (iii) its current and future fiduciaries.” In December 2021, Holzman Horner filed an arbitration demand over Aspen’s refusal to pay legal fees, naming as respondents Aspen and Mr. Valdez, as Trustee of the Aspen ESOP. The resulting arbitration lasted three years, and ended on September 24, 2024 when the arbitrator issued a final award granting Holzman Horner the full monetary relief it requested – over $900,000. Holzman Horner is seeking to enforce the arbitration award, while the Aspen ESOP moved to vacate it. In this order the court confirmed the arbitration award. The ESOP argued that it was not a party to the arbitration and never agreed to arbitrate. The court did not agree. It held that the Aspen ESOP properly agreed to arbitrate through Mr. Valdez, the ESOP’s trustee, and that the Aspen ESOP was a party to the arbitration at every turn. As a result, the court rejected the ESOP’s two grounds to vacate the arbitration award – namely that there was no agreement to arbitrate and that the arbitrator exceeded her powers. Accordingly, the court declined to disturb the arbitration award.

Breach of Fiduciary Duty

First Circuit

Piercy v. AT&T Inc., No. 24-10608-NMG, 2025 WL 2809008 (D. Mass. Sep. 30, 2025) (Judge Nathaniel M. Gorton). Four weeks ago, Your ERISA Watch reported on Magistrate Judge Paul G. Levenson’s report and recommendation in this putative class action challenging AT&T’s annuitization of $8 billion worth of its pension liabilities with the insurer Athene Annuity & Life Assurance Company of New York under ERISA. In his report and recommendation Judge Levenson recommended dismissal of all nine of plaintiffs’ claims. In response, both parties filed objections to aspects of the report, and plaintiffs also moved for leave to file an amended complaint. In a brief order this week, the court accepted and adopted the report and recommendation, resulting in the dismissal of the case. The court began its discussion by addressing defendants’ objection to the report’s conclusion that plaintiffs alleged an actual injury based upon their receipt of less valuable annuities than that to which they were entitled. Defendants argued that there was no concrete injury because retirement benefits are non-transferable, meaning plaintiffs’ injuries “cannot be realized through a secondary market.” The court ultimately agreed with the Magistrate’s logic and rejected this argument. It stated that a secondary market may be helpful, but the lack of one does not automatically foreclose proof of harm. “In determining whether a harm is cognizable for the purpose of Article III standing, courts look for comparisons to harms traditionally recognized as providing the basis for a lawsuit. As the Magistrate Judge points out, there would be little question as to whether an annuity recipient is harmed if he or she received a riskier product than was purchased. That the annuities at issue here cannot be resold is not controlling, nor is the fact that they were purchased by a fiduciary. Plaintiffs received an inferior financial benefit than that to which they were entitled, a harm that bears a ‘close relationship’ to harms ‘traditionally recognized’ as giving rise to suit.” The court then turned to plaintiffs’ objection, namely that the report misinterpreted Supreme Court precedent in Fifth Third Bancorp v. Dudenhoeffer, 573 U.S. 409 (2014) to apply the “could-not-have” standard. The court expressed hesitation about adopting plaintiffs’ posture in which the “could-not-have” standard is limited to the facts of Fifth Third Bancorp. Regardless, the court stressed that in the ERISA context courts have interpreted Rule 12(b)(6) to require plaintiffs to show that a prudent fiduciary would have acted differently in like circumstances. Crucially here, the court agreed with the Magistrate that plaintiffs had not shown that a prudent fiduciary would not have selected the Athene group annuity contracts. Thus, the court agreed with the report and recommendation’s holding that plaintiffs failed to meet this standard, and by extension, failed to state a fiduciary breach claim upon which relief can be granted. For these reasons, the court overruled the objections before it and adopted the report. Finally, in a footnote, the court clarified that it would duly consider plaintiffs’ motion for leave to file an amended complaint after defendants have filed their briefing in response.

Fourth Circuit

Trull v. Board of Trustees of the McCreary Modern, Inc. Employee Stock Ownership Plan, No. 5:25-CV-00011-KDB-SCR, 2025 WL 2803605 (W.D.N.C. Oct. 1, 2025) (Judge Kenneth D. Bell). Plaintiff Calvin Trull is a former employee of McCreary Modern, Inc., who participated in the company’s Employee Stock Ownership Plan (“ESOP”) between 2019 and 2024. Mr. Trull alleges that the fiduciaries of the ESOP violated their duties under 29 U.S.C. § 1104(a) and § 1105(a) when they maintained a cash buffer in the McCreary ESOP which he believes was too large and too conservatively invested. Defendants moved to dismiss the complaint, arguing that because this is an ESOP they were exempted from the duty to diversity under Supreme Court precedent. The court very much agreed. “Trull’s claims appear to be a remedy in search of a wrong, failing to clear the high hurdle set by Congress and reinforced by the Supreme Court in Dudenhoeffer. Indeed, this is the very type of claim Congress sought to protect against when it exempted ESOPs from the diversification obligation arising from the fiduciary duty of prudence. Had the cash buffer been de minimis, as Trull suggests is not just permissible but required, the Plan may have been unable to adequately pay departing employees or repurchase shares. To hold Defendants accountable for diversifying the ESOP cash buffer – under the facts alleged – even though they are expressly not required to do so, would leave them ‘between a rock and a hard place and likely to be sued for imprudence either way if [they] guess[] wrong.’” The court stated that it found the premise of Mr. Trull’s action “untenable where, again, Defendants were under no duty to diversify any part of the plan, let alone the cash buffer.” Accordingly, the court held that Mr. Trull failed to allege a plausible breach of fiduciary duty, and thus granted the motion to dismiss his claims.

Sixth Circuit

Bailey v. Sedgwick Claims Management Services Inc., No. 2:24-cv-02749-TLP-tmp, 2025 WL 2779899 (W.D. Tenn. Sep. 26, 2025) (Judge Thomas L. Parker). Plaintiff Korine Bailey is an employee of Sedgwick Claims Management Services, Inc. and a participant of the Sedgwick Welfare Benefits Plan. Ms. Bailey, along with other similarly situated participants of the plan, is charged a tobacco surcharge as part of her health insurance because she is a tobacco user. On behalf of herself and a class of similarly situated individuals, Ms. Bailey alleges that Sedgwick’s tobacco surcharge violates ERISA’s anti-discrimination provisions, fiduciary duty provisions, and prohibited transaction provisions. Additionally, Ms. Bailey alleges that Sedgwick impermissibly imposes higher premiums for supplemental life and dependent life insurance based on tobacco use, which she contends further violates ERISA’s anti-discrimination provisions. Sedgwick moved to dismiss the case, which the court addressed in this decision. First, the court tackled Sedgwick’s standing arguments. Sedgwick argued that Ms. Bailey lacks standing to sue over the tobacco surcharge because she does not allege that she ever enrolled in, or attempted to enroll in, the Quit for Life education program. Like other district courts presented with similar arguments, the court was not persuaded by Sedgwick’s framing. Instead, it held, “[f]or a wellness program like Sedgwick’s to be lawful, it must satisfy all the relevant requirements. So if its program does not meet the relevant requirements, Sedgwick cannot impose a surcharge on tobacco users, which would mean the tobacco surcharge that Plaintiff has been paying is illegal. And with this, Plaintiff alleges an injury-in-fact.” The court simply agreed with Ms. Bailey that she has the right not to be charged a surcharge that violates ERISA in the first instance, and that this harm can be redressed through this lawsuit. As a result, the court denied the motion to dismiss the anti-discrimination, fiduciary breach, and prohibited transaction claims related to the surcharge for lack of Article III standing. However, the court agreed with Sedgwick that Ms. Bailey lacks standing to pursue any claim related to the supplemental and dependent life insurance premiums because she failed to allege that she is enrolled in those benefit programs or that she plans to. The court thus granted the motion to dismiss the claims regarding life insurance premiums, without prejudice, for lack of subject matter jurisdiction. Next, the court addressed Sedgwick’s challenge to the validity of the Department of Labor’s governing regulations under Loper Bright. Like nearly all Loper Bright challenges that have come up in ERISA cases thus far, the court found Sedgwick’s arguments underdeveloped and unpersuasive. “Sedgwick has failed to argue with any detail how the DOL lacked authority to issue the regulation. Sedgwick has merely made passing references to Loper Bright with little analysis. Rather the core of Sedgwick’s position is that the language in the regulation and the statute conflict, so the statute must trump the regulation. But, based on the arguments made to date, the Court is not convinced at this stage that [The Public Health Service Act] and the regulation differ in a material way.” The court then turned to the tobacco surcharge itself. To begin, the court disagreed with Ms. Bailey that Sedgwick does not offer the full reward to all plan participants because of its practice of only offering retroactive reimbursements to those who complete the tobacco cessation wellness program before June 30^th each year. “And accepting that full reward includes retroactive reimbursement, the Court agrees with Sedgwick that the full reward here is available to all similarly situated individuals. Indeed, tobacco users can be put in the same position as non-tobacco users so long as they complete Quit for Life by June 30th. So Sedgwick offers the full reward to everyone.” Moreover, the court found that the Quit for Life program is a satisfactory reasonable alternative standard, and that Sedgwick properly notified plan participants of the existence of a reasonable alternative standard. The court thus dismissed aspects of Ms. Bailey’s claims to reflect these holdings. That said, Ms. Bailey’s claim that the tobacco surcharge violates ERISA survived because the court found she plausibly alleged that the plan materials fail to notify participants that a physician’s recommendation will be accommodated. Following these holdings, the court assessed the fiduciary breach and prohibited transaction claims. The court largely left these claims undisturbed. It concluded that Plaintiff properly alleged that Sedgwick’s assessment and collection of the tobacco surcharge, and its retention of the surcharge funds at the expense of the Plan, violate fiduciary duties imposed by § 1104(a)(1) and constitute prohibited transactions under § 1106(b)(1), and also that plaintiff plausibly alleged Sedgwick violated fiduciary duties imposed by § 1104(a)(1) when it allegedly failed to adequately review the Plan materials and communications and failed to include information required by 29 C.F.R. § 2590.702(f)(4)(v). Furthermore, the court found Ms. Bailey sufficiently alleged a harm to the plan to state a claim under Section 502(a)(2), given her allegations that Sedgwick commingled the funds from the tobacco surcharge and enriched itself at the expense of the plan. However, the court dismissed the fiduciary breach claims to the extent they arose from the creation of the tobacco wellness plan, its implementation according to the Plan terms, or the preparation of any Plan materials and communications, because the court found that those actions do not give rise to fiduciary duties under ERISA. Thus, for the reasons explained, the court granted in part and denied in part the motion to dismiss.

Ciena Healthcare Management, Inc. v. Group Resources Inc., No. 24-cv-12362, 2025 WL 2773128 (E.D. Mich. Sep. 26, 2025) (Judge Mark A. Goldsmith). Plaintiff Ciena Healthcare Management Inc. offers its employees medical and dental benefits through a self-funded benefits plan, the Ciena Healthcare Management Inc. Health and Welfare Plan (collectively “Ciena”). In 2008, it hired Employee Benefit Concepts, Inc. (“EBC”), to be the administrative services agent of the Plan. Later, Group Resources Acquisitions, LLC (“GRA”) acquired EBC. At all relevant times defendant Andrew Willoughby was the CEO and president of GRA and its related entities, and defendant David Obermeyer was the CFO and executive vice president. In late 2023 and early 2024, Ciena noticed problems with the plan. It discovered that many of its employees’ medical and dental providers were not being paid, despite the fact that funds were being taken out of the plan. “Ciena discovered that approximately $14.1 million in claims had not been paid by Group Resources, even though the check registers that Group Resources sent to Ciena showed that these claims were paid.” Ciena alleges that after an investigation it discovered that Mr. Obermeyer had stolen assets from the Plan, by transferring funds from Ciena’s account into one or more accounts in Group Resources’ name and then transferring the funds into bank accounts controlled by Obermeyer Wealth Management, LLC (“OWM”) and Southern Oak Design & Build LLC (“SODB”), two companies he owned and controlled. Ciena alleges that documents produced in expedited discovery demonstrate that Mr. Willoughby was either aware or should have been aware of Mr. Obermeyer’s conduct, that thousands of claims were mishandled, and that $20 million is still missing from the plan after being improperly transferred out of Ciena’s account by defendants. Ciena seeks to rectify this harm in this action brought under ERISA and state law. Before the court here were two motions to dismiss. In the first motion, Mr. Willoughby moved to dismiss the claims against him. In the second, Mr. Obermeyer, OWM, and SODB moved to dismiss the claims asserted against them. In this decision the court denied dismissal as to Mr. Willoughby and Mr. Obermeyer, but granted it as to OWM and SODB. The court specifically granted the motion to dismiss OWM and SODB as it found the complaint failed to allege personal jurisdiction against these two entities. However, the court concluded that it had jurisdiction over Mr. Willoughby and Mr. Obermeyer as to both the ERISA and state law claims asserted against them, and that the complaint adequately alleged these causes of action. The court disagreed with the two men that Ciena failed to properly plead that they were fiduciaries under ERISA. “Ciena’s complaint sufficiently alleges fiduciary status as to Willoughby and Obermeyer. It sets forth allegations that both ‘maintained and exercised the authority to adjudicate and approve or deny claims…and appeals.’” The court added that Ciena alleged that the men were both actively involved in business related to the plan, and that they exercised discretionary control over the plan assets through their conduct. Additionally, the court decided to exercise supplemental jurisdiction over the remaining state law claims, and found that the complaint plausibly alleges these causes of action. Accordingly, the court denied the motions to dismiss as to Mr. Willoughby and Mr. Obermeyer, but agreed to dismiss Mr. Obermeyer’s two companies as parties to this action.

Fulton v. FCA US LLC, No. 24-cv-13159, 2025 WL 2800003 (E.D. Mich. Sep. 30, 2025) (Judge Robert J. White). In this action a putative class of participants and beneficiaries in the FCA US LLC UAW Savings Plan and the FCA US LLC Salaried Employees’ Savings Plan allege that FCA US LLC has breached its fiduciary duties under ERISA by retaining its own custom Target Date Funds (“TDFs”) and US Large Cap Equity Fund in the plan after sustained periods of underperformance. FCA moved to dismiss plaintiffs’ complaint, arguing that the court cannot infer from plaintiffs’ allegations that FCA’s inclusion and retention of the challenged funds in its retirement plans was flawed. Plaintiffs offered Sixth Circuit precedent that found allegations nearly identical to theirs sufficient to survive a motion to dismiss. The court agreed with plaintiffs, and taking their allegations as true, found they established their fiduciary breach claims under ERISA. “Here, the Court finds that Plaintiffs presented evidence beyond the existence of better performing funds. Namely, Plaintiffs argued that the Challenged Funds failed to meet their own internal goals and benchmarks. When considered together, the Challenged Funds’ repeated inability to meet FCA’s designated benchmarks and the availability of alternative, better-performing investments establishes an inference of flaws in the fiduciary process. Thus…the Court finds that claims regarding both the FCA TDFs and the Large Cap Equity Fund may proceed.”

Iannone v. AutoZone Inc., No. 2:19-cv-02779-MSN-tmp, 2025 WL 2797074 (W.D. Tenn. Sep. 30, 2025) (Judge Mark S. Norris). Plaintiffs brought this action against Defendants AutoZone, Inc. and members of the AutoZone investment committee, as well as Northern Trust Corporation and Northern Trust, Inc. (the Northern Trust defendants agreed to pay $2,500,000 to settle the claims against them and were dismissed as parties to this action) under ERISA for breach of fiduciary duties to the AutoZone 401(k) Plan. On December 7, 2022, the court certified a class of plan participants and beneficiaries who invested in any of the challenged funds at issue in this litigation. Then, from October 23-31, 2023, the court held a bench trial. At the close of trial the AutoZone defendants moved for judgment on partial findings under Fed. R. Civ. P. 52(c) as to two of the claims involving recordkeeping fees and the GoalMaker target date funds, in addition to what Defendants viewed as a separate claim related to Defendants’ monitoring of the plan’s share classes. According to defendants, plaintiffs failed to put on proof of causation or damages related to these claims. In response, plaintiffs conceded that, based on an earlier ruling of the Court, they had not been able to put on evidence of loss associated with the recordkeeping fees and allowed that dismissal of that claim was appropriate. Additionally, plaintiffs maintained that they were not bringing a stand-alone claim as to the share classes, and so were not opposed to dismissal of such a claim. However, plaintiffs objected to defendants’ assertion that they had not put on proof of causation or loss with regard to the GoalMaker funds. Based on the parties’ agreement as to the recordkeeping fees and share class, the court granted defendants’ Rule 52(c) motion as it pertained to those claims. However, the court reserved ruling on the motion as it related to the GoalMaker funds and the stable value fund claim. In this decision the court made its final rulings, and found in favor of AutoZone. The court focused its analysis on whether defendants breached their fiduciary duty of prudence in the monitoring of the challenged investments, and if so, whether any breach caused losses to the plan. As an initial matter, the court agreed with defendants that plaintiffs failed to prove that they employed an imprudent process. “The record here shows a regular, structured review of the Plan’s investments with the assistance of independent advisors. The Committee met on a quarterly cadence for years, received advanced meeting materials, and discussed capital markets, fund performance, fees, and recommended actions at each meeting. Each advisor prepared written ‘report cards’ evaluating performance and fees for every fund. Minutes were prepared by Ms. Samuels-Kater and reflected summaries of deliberations and decisions. The Committee’s Charter charged it to monitor investment performance against benchmarks, and the Committee relied on its advisors’ expertise in doing so. Committee members had relevant training and experience, including fiduciary training from advisors and outside counsel.” However, the court’s inquiry did not end with its finding that defendants employed a prudent process. Instead, it considered plaintiffs’ specific challenges to their monitoring of the stable value fund and the GoalMaker target date funds. But it determined that they failed to show imprudence in the monitoring of either challenged investment option. Nor did the court find that plaintiffs showed defendants failed to negotiate reasonably or that there was imprudence in their 2017 request for proposal. Instead, it viewed the record as demonstrating that the request for proposal was competitive, done with the assistance of outside counsel, and that defendants did their due diligence. Finally, the court stated that even if plaintiffs had shown a breach, they failed to prove loss and causation tied to the challenged funds. With regards to the stable value fund, the court said that plaintiffs did not show there was a prudently available alternative with comparable risk characteristics that produced higher net returns. As for the GoalMaker target date funds, the court stated, “Plaintiffs largely compared fees rather than net performance, and did not demonstrate that participants would have accumulated more had the Plan adopted index funds earlier, accounting for performance and implementation timing.” In the end, the court stressed that “ERISA demands prudence, not perfection.” Here, AutoZone’s results were not perfect, but in the eyes of the court, they were still the result of prudent behavior. Accordingly, the court entered judgment for defendants on the remaining claims. 

Disability Benefit Claims

Second Circuit

Pistilli v. First Unum Life Ins. Co., No. 24 Civ. 5266 (AKH), 2025 WL 2814714 (S.D.N.Y. Oct. 3, 2025) (Judge Alvin K. Hellerstein). Plaintiff Lia Pistilli filed this ERISA benefits action to challenge First Unum Life Insurance Company’s denial of her claim for long-term disability benefits. First Unum denied the claim as it found that Ms. Pistilli’s post-concussive symptoms did not preclude her from performing the material duties of her normal occupation as a corporate finance attorney. Both parties moved for judgment. Before the court reached the merits of the denial, it addressed their dispute over the applicable standard of review. Ms. Pistilli argued that de novoreview should apply, notwithstanding the discretionary language in the plan, because First Unum failed to consult with qualified medical reviewers, provide an impartial review by independent reviewers, or render a timely decision. The court rejected all three arguments, finding them meritless. Contrary to Ms. Pistilli’s assertions, the court held that First Unum properly consulted health care professionals with appropriate medical training and experience, in compliance with the Department of Labor regulations, did not cherry-pick medical providers to support a denial, and acted in good faith by giving itself a 45-day extension in order to provide a fuller examination of her claim before rendering a final decision. Thus, the court applied the deferential arbitrary and capricious standard of review. Applying this standard, the court held that the decision was reasonable and supported by substantial objective medical evidence in the record. Among other things, the court pointed out that imaging of Ms. Pistilli’s brain, conducted after her car accident, indicated no changes in comparison to a brain scan she had had done years earlier. In fact, the court was confident that there was better evidence in the medical record to support First Unum’s decision than to support a finding of disability, and the court held that even under de novoreview it would still find that Ms. Pistilli had not proved her case by a preponderance of the evidence. For this reason, the court entered judgment for First Unum and closed the case.

Fifth Circuit

Nelson v. Reliance Standard Life Ins., No. 6:24-CV-01307, 2025 WL 2811123 (W.D. La. Sep. 30, 2025) (Judge Robert R. Summerhays). Beginning in October of 2020, plaintiff Andrea Nelson became disabled from her occupation as a technical services sale representative because of a collection of medical conditions, including acute stroke with paralysis on her left side, uncontrolled diabetes, hypertension, encephalopathy, and side effects from medication. The claims administrator of her ERISA-governed long-term disability plan, Reliance Standard Life Insurance, approved her claim for benefits on April 6, 2021 and began issuing her monthly payments. This lawsuit stems from Reliance’s termination of those benefits after the standard of disability transitioned from “own occupation” to “any occupation.” The stated reason for the denial was that Ms. Nelson failed to provide updated medical information or complete the Authorization to Release Information, Activities of Daily Living, and Educational Occupation forms Reliance had sent her. Although Ms. Nelson appealed the denial of her benefits, she largely failed to provide the information Reliance requested. As a result, Reliance upheld its decision. Almost nine months later, and at this point represented by counsel, Ms. Nelson submitted to Reliance more than 500 pages of medical records, as well as a sworn statement, and requested that it reconsider its decision to deny her claim. Reliance responded that its claim determination and subsequent appeal process was complete and the file was closed. Accordingly, Reliance refused to re-open Nelson’s case. Nelson then filed the present action under ERISA. Before the court were cross-motions for summary judgment with respect to the completeness of the administrative record. In addition, Ms. Nelson filed a motion in limine to include in the administrative record the supplemental documents that she provided to Reliance after she exhausted her appeal. Ms. Nelson argued that these additional records should be included because she provided them to Reliance six months before she filed the present action, which gave Reliance a fair opportunity to consider them. Reliance responded that Fifth Circuit precedent does not support reopening of the record once the administrative appeal process has been completed. It added that it had fully complied with the statute’s procedural requirements in handling Ms. Nelson’s claim and appeal. The court sided with Reliance. It noted that other courts addressing similar requests have generally rejected efforts to include documents in the record that were not before the administrator at the conclusion of the appeal. “As long as the administrator substantially complies with the procedural requirements of 29 C.F.R. § 2560.503-1, engages in a ‘meaningful dialogue’ with the beneficiary, and provides a beneficiary with a ‘full and fair’ review, courts generally have not allowed beneficiaries to re-open the administrative record and add supplemental records and information that was not before the administrator when the administrative appeal process was exhausted.” In the present matter, the court could find no evidence that Reliance mishandled Ms. Nelson’s claim or otherwise failed to comply with ERISA’s procedural requirements. The court said the fact that Ms. Nelson missed her opportunity to respond to or supplement the record before exhausting her administrative appeal does not undermine the fairness of the process. Moreover, the court did not find most of the 500-plus pages of medical records to be all that relevant in the first place, and noted that many of them were duplicates of records that were already in the administrative record. The court also rejected Ms. Nelson’s argument that the record should be supplemented because she was not represented by counsel during her administrative appeal. “Neither ERISA nor the regulations issued under ERISA make any distinction between beneficiaries who pursue their claims pro se and beneficiaries who are represented by counsel. Nor is there any evidence that Nelson was prevented from retaining counsel at any stage during Reliance’s appeal process. Moreover, nowhere in her briefing does Nelson explain how the benefits decision would have been any different if she had retained counsel.” Thus, the court concluded that supplementing the record with these documents would be contrary to Fifth Circuit precedent and require it to consider evidence that was not before the administrator at the time of the benefit determination. Accordingly, the court granted Reliance’s motion for summary judgment with respect to the administrative record and denied Ms. Nelson’s motion in limine and cross-motion for summary judgment. Consequently, the court limited the administrative record to the documents compiled by Reliance.

Medical Benefit Claims

Second Circuit

Tsetsekos v. Horizon Blue Cross Blue Shield of N. J., No. 24-cv-02920-NSR, 2025 WL 2773101 (S.D.N.Y. Sep. 29, 2025) (Judge Nelson Stephen Román). In July of 2022, while on vacation in Greece, plaintiff Katherine Tsetsekos suffered a severe brain aneurysm and a seizure after she contracted COVID-19. Over a one-month period, Ms. Tsetsekos was admitted to and treated at three different hospitals in Greece. She alleged that the care she received was suboptimal, and she continued to have complications. Because the hospital in Greece was unable to provide the care she needed, and COVID restrictions made transfer to another hospital in Europe unfeasible, Ms. Tsetsekos requested air ambulance transfer to New York for further treatment. This litigation stems from Blue Cross’s denial of her claim for emergency medical transport services. Under her Pfizer-sponsored health plan, such transportation is only considered medically necessary when (1) it is provided by an approved supplier, (2) other forms of transportation are medically contraindicated or unsafe based on the patient’s medical condition, and (3) the patient is transported to the nearest hospital with appropriate facilities. Blue Cross denied the claim for reimbursement, finding that the hospital in New York did not meet the policy’s requirement that covered transport be to the nearest hospital with appropriate facilities. After exhausting her administrative remedies, Ms. Tsetsekos filed this lawsuit asserting a single claim under Section 502(a)(1)(B). Blue Cross moved to dismiss for failure to state a claim upon which relief may be granted. Its motion was granted by the court in this order. “Even accepting all factual allegations as true, Plaintiff fails to plausibly allege that Horizon’s denial of air ambulance coverage breached the Plan, as she offers no facts showing that transport to Westchester Medical Center was medically necessary or met any prerequisites for coverage.” The court identified four principal deficiencies in the complaint: (1) the failure to allege that the air ambulance provider was an approved supplier under the Plan; (2) the failure to allege that ground transportation was medically contraindicated; (3) the failure to allege that Plaintiff was transported to the nearest appropriate hospital; and (4) the failure to satisfy the Plan’s additional requirements for air transport, including time sensitivity or pickup inaccessibility. All told, the court viewed the complaint as consisting almost entirely of bare legal conclusions that do not support Ms. Tsetsekos’ assertions. Thus, the court agreed with Blue Cross that the complaint, as currently pled, is insufficient to state its claim under the pleading standards set out in Twombly and Iqbal, particularly in light of the arbitrary and capricious standard of review. The court stressed, “[w]here, as here, the administrative record contains reasoned determinations from multiple qualified professionals concluding that treatment in Greece was adequate and that air transport was not medically necessary, the Court must defer to the plan administrator’s judgment.” Moreover, the court disagreed with Ms. Tsetsekos’ contention that discovery would help uncover key facts. “Twombly and Iqbal require a plaintiff to state a plausible claim before proceeding to discovery, and Plaintiff’s speculation falls short of that standard. Her claim, therefore, cannot proceed.” Finally, the court followed the Second Circuit’s long-held ruling that there is no right to a jury trial in suits seeking recovery of benefits under ERISA Section 502(a)(1)(B). The court thus denied Ms. Tsetsekos’ demand for a jury trial. Although the court granted the motion to dismiss, the court dismissed the claim without prejudice and granted plaintiff leave to file an amended complaint to address the shortcomings identified in this order.

Gary K. v. Anthem Blue Cross & Blue Shield, No. 1:24-cv-07878 (ALC), 2025 WL 2782409 (S.D.N.Y. Sep. 30, 2025) (Judge Andrew L. Carter, Jr.). Plaintiff Gary K. brings this ERISA case individually and on behalf of his minor son. Plaintiff asserts three causes of action stemming from Anthem Blue Cross and Blue Shield’s denial of coverage for his son’s stay at a residential treatment facility for adolescents struggling with mental health and substance abuse issues: (1) a claim for benefits under Section 502(a)(1)(B); (2) a claim for violation of the Mental Health Parity and Addiction Equity Act; and (3) a claim for statutory penalties for failure to produce plan-related documents and agreements and “other instruments under which the plan is established or operated.” Blue Cross denied coverage at the facility on two bases. First, Blue Cross argued that the plan requires residential treatment facilities to be accredited, and for a period of time during the boy’s stay the facility was not. Additionally, Blue Cross maintained that the care was not medically necessary, as it defines the term. Mr. K. argues that the plan language defining coverage for residential treatment facilities is ambiguous. He further maintains that the plan violates Parity Act requirements because the accreditation requirements for residential treatment facilities are more restrictive than those for skilled nursing facilities under the plan, and because the clinical criteria for medical necessity are more restrictive for residential treatment facilities than nursing or rehabilitation facilities. Blue Cross moved to dismiss all of Mr. K.’s claims except his claim for benefits during the period in which the facility was accredited. The court largely denied the motion in this decision. To begin, the court agreed with Mr. K. that it is unclear based on the ambiguous plan language whether the family was ineligible for payment of the child’s treatment during the period when the facility was unaccredited. “The Court agrees with Plaintiff that the requirements for a residential treatment provider are not as clear as other definitions provided in the Plan.” Because the relevant language “is capable of more than one meaning when viewed objectively by a reasonably intelligent person who has examined the context of the entire…agreement,” the court held that plaintiff adequately alleged a plausible claim for benefits even for the unaccredited period. Thus, the court denied the motion to partially dismiss the denial of benefits claim. Next, the court denied Blue Cross’s motion to dismiss the Parity Act violation claim. The court found that the alleged discrepancies between plan requirements for skilled nursing centers and residential treatment centers were sufficient to state a Parity Act claim. Finally, the court turned to the statutory penalties claim. It split its ruling in two. Regarding the administrative services agreement, the court concluded that it falls within the scope of Section 1024, because it is an instrument establishing the plan. However, the court found that Mr. K. “failed to state a claim that he is entitled to statutory penalties for the ‘medical necessity criteria.’” The court agreed with Blue Cross that this information is not a plan document and that failure to provide it does not give rise to civil penalties under ERISA. Thus, the court dismissed the statutory penalty claim seeking the medical necessity criteria. However, despite this one holding, Mr. K. was still left with all three of his causes of action following this decision, and Blue Cross’s motion to dismiss was largely unsuccessful.

Fourth Circuit

David B. v. Blue Cross Blue Shield of N.C., No. 1:24CV896, 2025 WL 2784309 (M.D.N.C. Sep. 30, 2025) (Magistrate Judge L. Patrick Auld). Plaintiffs David B. and A.B. filed this action against defendants Blue Cross Blue Shield of North Carolina, insightsoftware, LLC, the insightsoftware LLC Health Benefits Plan, and Group Administrator Doe alleging that the denial of payment for A.B.’s residential mental health treatment was in violation of ERISA. The complaint asserts three causes of action: (1) a claim for recovery of benefits under Section 502(a)(1)(B); (2) a claim for equitable relief for violation of the Mental Health Parity and Addiction Equity Act under Section 502(a)(3); and (3) a claim for statutory penalties for nondisclosure of requested plan documents under 29 U.S.C. §§ 1132(a)(1)(A) and (c). Defendants moved to dismiss the complaint. The court granted the motion to dismiss the equitable relief claim, but otherwise denied the motion. To begin, the court concluded that plaintiffs adequately stated their claim for benefits. “The Court need not resolve which standard of review applies at this stage in the litigation because, even under the deferential abuse of discretion standard… Plaintiffs have sufficiently pleaded a plausible claim for wrongful denial of benefits under Section 1132(a)(1)(B).” Defendants’ arguments for dismissal, the court concluded, were disputes over plaintiffs’ analysis of the terms of the plan. The court stated that attempting to resolve such a dispute at this stage would improperly “create an end-run around the structured process for judicial review in ERISA cases for a plan participant challenging a specific denial of coverage.” Thus, plaintiffs’ benefit claim survived defendants’ pleading challenge. However, the court agreed with defendants that the Mental Health Parity claim was duplicative of the claim for benefits under Varity and Korotynska, and that Section 502(a)(1)(B) provides adequate relief to them. Therefore, the court granted the motion to dismiss the second cause of action. Last, the court deferred ruling on plaintiffs’ statutory penalties claim for now because it is unclear which entity is the plan administrator. “In light of the absence of this information in the pleadings before the Court and, as quoted above, Plaintiffs’ allegations that Blue Cross NC constituted either the plan administrator or, through agency or delegation, obtained the plan administrator’s duty to receive participants’ document requests under ERISA, the Court will not dismiss the Third Cause of Action at this early stage in the litigation.” As a result, the court granted the motion to dismiss insofar as it related to the equitable relief claim, but otherwise denied it.

Fifth Circuit

Brett C. v. BlueCross BlueShield of La., No. 21-00589-BAJ-RLB, 2025 WL 2797068 (M.D. La. Sep. 30, 2025) (Judge Brian A. Jackson). Plaintiff Brett C., individually and on behalf of his son, B.C., filed this ERISA action to challenge his healthcare plan’s denial of claims for B.C.’s care at four facilities over the course of two years. During the two-year period at issue, the plan’s third-party claims administrator changed from Blue Cross and Blue Shield of Louisiana to United Healthcare Insurance Company. The parties submitted competing motions for judgment under Rule 52 on the claims for benefits. The court reviewed Blue Cross’s denials of plaintiff’s claims under an abuse of discretion standard of review, while it reviewed United’s action under a de novostandard. Under both standards, the court found in favor of defendants. The court discussed the claims against Blue Cross first. Regarding the first facility, the court upheld the denial of benefits because it was clear that plaintiff submitted his claim ten months after the plan’s 15-month deadline to submit had elapsed. Next, the court agreed with Blue Cross that the second facility was not an eligible mental healthcare provider because it was not properly licensed. “BCBSLA’s interpretation of its Plan language that eligible providers must be licensed and acting within the scope of their license is not only defensible but persuasive. It follows the plain meaning of the plan language and is consistent with a fair reading of the Plan. BCBSLA’s subsequent decision to deny Plaintiff’s claims at Aspiro because of Aspiro’s failure to meet the licensing requirements for the type of care it provided is thus not arbitrary and capricious nor an abuse of discretion.” The court then evaluated the denials for the last two facilities, which were reached on medical necessity grounds. In both instances, the court found that Blue Cross provided Mr. C. with a full and fair review and offered reasonable rationales for the denials which were supported by evidence in the medical record. Thus, considering the complete administrative record, the court concluded that Blue Cross did not abuse its discretion in its determination that B.C.’s care at these two facilities was not medically necessary. Finally, the court considered plaintiff’s claim against United. This claim related to United’s denial of benefits for B.C.’s care at the last of the four facilities and its lack of response to his May 9, 2022 letter. The heart of the dispute was whether this letter constituted a valid appeal under the terms of the plan. The court agreed with United that it did not, stressing that ERISA requires only a single mandatory review. “Regardless of what title Plaintiff gave to his November 2021 letter to United, it was a clear request for review of a post-service claim denial that fits the definition for an appeal under the Plan terms. Plaintiff’s arguments that insured parties are entitled to a ‘retrospective review’ is not supported by a reading of the Plan documents nor relevant law.” Accordingly, the court found that United’s denial of the claim at Heritage did not violate ERISA. Thus, as explained above, the court denied plaintiff’s motion for judgment and entered judgment in favor of defendants on all claims.

Pension Benefit Claims

Fourth Circuit

Frankenstein v. Host International, Inc., No. MJM-20-1100, 2025 WL 2781543 (D. Md. Sep. 30, 2025) (Judge Matthew J. Maddox). Plaintiff Dan Frankenstein was a union employee of the airport food and beverage operator, Host International, Inc. Like many of Host’s employees, Mr. Frankenstein was paid both regular wages and tips. For the purposes of Host’s 401(k) retirement savings plan, tips paid via credit card payments were eligible to be put towards employee contributions, but they were treated differently from regular wages. Although employee contributions from both types of compensation were matched by Host, regular wages were contributed to the plan pre-tax, while “arrears” contributions, i.e. the tips, were considered after-tax contributions. Mr. Frankenstein filed this ERISA action on behalf of himself and a putative class against Host, the plan’s retirement committee, and Host’s Vice President of Human Resources to challenge this policy. Defendants’ motion for summary judgment was before the court. (The court previously denied Mr. Frankenstein’s motion for class certification, as Your ERISA Watch detailed in our July 17, 2024 edition.) In this decision the court entered judgment in favor of defendants on all of Mr. Frankenstein’s counts. The court addressed the benefits claim first. As there was no dispute that the plan granted discretion to the administrator to interpret the plan’s provisions, the court applied deferential scrutiny. Under this standard of review, the court determined that the decision was reasonable under the Fourth Circuit’s Booth factors, and thus did not disturb it. The court determined that Host’s reading of the term “effectively available Compensation” and its subsequent limiting of pre-tax deferrals to employees’ compensation through payroll, was sensible, consistently applied, supported by the other language of the plan, and complied with both ERISA and the purposes of the plan. Moreover, the court found that the claims administrator and the committee reviewed and considered adequate materials in reaching their decision and arrived at this decision through a reasoned and principled process. For these reasons, the court disagreed with Mr. Frankenstein that the administrator’s determination denying his request was an abuse of discretion. Accordingly, the court entered summary judgment in favor of defendants on count one. Next, the court discussed the two fiduciary breach claims. It identified several issues with these causes of action, including that there was no genuine dispute that, in denying plaintiff’s claim, defendants complied with the terms of the plan, that the claim under § 404(a)(1)(D) is a repackaging of the denial of benefits claim, that there was no evidence of loss on the part of the plan, and the remedy of reformation is moot because plaintiff now has the relief he requested and can defer credit card tips pre-tax into the plan. Based on these holdings, the court concluded defendants were entitled to summary judgment on the fiduciary breach claims. Finally, the court found that Mr. Frankenstein failed to carry his burden of showing that defendants took any adverse employment action against him for the purpose of interfering with his rights. As a result, the court entered summary judgment in favor of defendants on Mr. Frankenstein’s claim under Section 510. Thus, as explained above, defendants’ motion for summary judgment was granted in its entirety, bringing Mr. Frankenstein’s action to a close.

Eleventh Circuit

Dellapa v. Major League Baseball Players Benefit Plan, No. 8:25-cv-00859-SDM-AEP, 2025 WL 2780223 (M.D. Fla. Sep. 30, 2025) (Judge Steven D. Merryday). Plaintiff Dawn Dellapa commenced this action against the Major League Baseball Players Benefit Plan and the plan’s Pension Committee after she was denied a surviving spouse pension benefit following the death of her husband in December 2022. (Her husband was Tom Browning, a 1990 World Series winner with the Cincinnati Reds and one of the few pitchers in the history of baseball to throw a perfect game.) Defendants denied Ms. Dellapa’s claim for benefits because she was not married to Mr. Browning for at least one continuous year prior to his death, as the plan requires. In her action, Ms. Dellapa alleges that the denial was in violation of ERISA. Ms. Dellapa seeks benefits she believes are due to her as a qualified spouse under the plan. Alternatively, Ms. Dellapa states a claim for discrimination under Section 510, asserting that the stringent standard for surviving spouses of retired members amounts to age discrimination. She seeks to enjoin the Committee’s enforcement of the one-year marriage minimum as a violation of ERISA’s anti-discrimination provision. Defendants moved to dismiss the complaint under Rule 12(b)(6). The court granted the motion to dismiss. First, the court agreed with defendants that Ms. Dellapa could not sustain her claim for benefits under Section 502(a)(1)(B) because she was ineligible for a surviving spouse benefit under the plain language of the plan. The plan not only defines a surviving spouse as a spouse “who survives after the death of a Member,” but then goes on to list four distinct additional conditions on who qualifies as a beneficiary. One of those conditions is that the marriage must have lasted for a continuous period of at least one year before the date of the member’s death. The court agreed with defendants that those provisions would be superfluous if survival alone sufficed, meaning “the four categories delimit, not merely suggest, who qualifies as a spouse beneficiary.” Thus, the court held that the Committee reasonably understood, interpreted, and applied the plan. The court also dismissed Ms. Dellapa’s discrimination claim, stating “even if Dellapa’s allegation of facial age discrimination is accepted, Section 510 is inapplicable because Section 510 does not reach the design or terms of a plan’s benefits.” Because the court found that defendants exercised reasonable discretion in interpreting the plan’s language, and because the enforcement of the plan was non-discriminatory, the court granted defendants’ motion and dismissed the case.

Pleading Issues & Procedure

First Circuit

Greater Boston Plumbing Contractors Association v. Alpine, No. 20-12283-GAO, 2025 WL 2777878 (D. Mass. Sep. 26, 2025) (Judge George A. O’Toole, Jr.). A trade association that represents the interests of approximately sixty unionized plumbing contractors and businesses who have signed onto a collective bargaining agreement, Greater Boston Plumbing Contractors Association brings this suit against the Director of the Massachusetts Department of Family and Medical Leave, William Alpine, seeking a declaration that a section of the Massachusetts Paid Family and Medical Leave Act is preempted in part or in whole by federal law. Mr. Alpine moved to dismiss the complaint for lack of subject-matter jurisdiction, contending that the association lacks standing under Article III to bring its lawsuit. The association argued that there is an impending injury “in the form of an enforcement action by [the Department], criminal and other penalties, and/or civil liability” based upon its perceived inability to comply simultaneously with both state and federal law. The court noted, however, that there is nothing in the record to demonstrate that the Department has commenced any enforcement action against the association or any of its signatory contractors for failing to comply with the state law. “Years of inaction do not substantiate a claim by the plaintiff that there is a substantial risk that the perceived harm will occur, nor that it is certainly impending.” Plaintiff further argued that it may face harm if the employers have to reimburse a portion of a Consolidated Omnibus Budget Reconciliation Act (“COBRA”) premium for an employee who runs out of banked hours in the healthcare plan. The association posited that this puts its employers in imminent harm of an enforcement action and requires them to act now to plan for that theoretical gap. However, the court stated that “the number of actions that must occur to put the employers in that possible position because of the purported tension between the two laws indicate that the potential injury is not imminent.” And, while the court acknowledged “there could be an employee who meets all these conditions and has lost health insurance coverage from going on PFML leave and subsequently seeks reimbursement for an employer’s share of a COBRA premium, [plaintiff] has not tendered any specific and concrete one. This lengthy and speculative chain of possibilities to lead to what is admittedly a rare situation is insufficient to satisfy the plaintiff’s burden of showing actual or imminent harm.” For these reasons, the court agreed with Mr. Alpine that the threat of future injury because of the statute’s operation or enforcement is simply too speculative for Article III’s purposes. Thus, the court concluded that plaintiff failed to plead a cognizable injury, and accordingly granted the Department’s motion to dismiss for lack of subject-matter jurisdiction.

Fourth Circuit

Blackett v. Unum Life Ins. Co. of Am., No. 1:24-2259-CDA, 2025 WL 2781544 (D. Md. Sep. 30, 2025) (Magistrate Judge Charles D. Austin). This lawsuit arises from Unum Life Insurance Company of America’s termination of plaintiff Holly Smith Blackett’s long-term disability and waiver of life insurance premium benefits. Ms. Smith Blackett commenced this ERISA suit in August of 2024 asserting claims for disability benefits, life insurance benefit coverage, and failure to provide a full and fair review as required by 29 U.S.C. § 1133. Unum filed a motion to dismiss the failure to provide a full and fair review claim. As an initial matter, the court agreed with Unum that 29 U.S.C. § 1133 does not provide litigants an enforcement mechanism in and of itself. Moreover, the court held that Ms. Smith Blackett could not pursue such a claim under Section 502(a)(2) of ERISA because the relief she seeks is for her own personal benefit rather than the benefit of the welfare plan as a whole. Thus, the court stated that for her to recover an equitable benefit directly, Ms. Smith Blackett must bring her claim under Section 502(a)(3). But the court found a problem with Section 502(a)(3) too. The court concluded that regardless of label, the substance of the allegations make clear that Ms. Smith Blackett is not truly seeking any form of equitable relief. Rather, the court concurred with Unum that the challenged full and fair review claim was little more than a repackaging of the two claims for benefits, and that Section 502(a)(1)(B) therefore provides adequate relief. Because Ms. Smith Blackett has an adequate remedy available to her elsewhere under Section 502, the court granted the motion to dismiss the claim under Section 502(a)(3). Thus, based on the foregoing, the court granted Unum’s motion to dismiss the full and fair review claim because Ms. Smith Blackett failed to state a claim upon which relief can be granted.

Fifth Circuit

Thomas v. Amazon.com Services, Inc., No. 4:21-CV-02997, 2025 WL 2774123 (S.D. Tex. Sep. 28, 2025) (Judge Drew B. Tipton). Until he was terminated from his employment in September of 2019, plaintiff Michel Thomas worked as an associate at one of defendant Amazon.com Services, Inc.’s Houston-area warehouses. During his time there, Mr. Thomas was covered by an ERISA-governed welfare plan, the AmazonTXCare Employee Injury Benefit Plan, administered by defendant Anchor Risk Management. Between March and May of 2019, Mr. Thomas suffered three work-related injuries and sought medical and disability benefits for each under the welfare plan. Anchor denied the claims, citing various reasons for its denials. In addition, Mr. Thomas requested leave under the Family and Medical Leave Act (“FMLA”) in July 2019, but Amazon denied that request as well. After Mr. Thomas’s medical restrictions expired, Amazon directed him to return to work. When he did not, Amazon fired him. Mr. Thomas, proceeding pro se, filed this lawsuit under ERISA and FMLA on September 15, 2021 – more than a year after the final benefits denial and nearly two years after his termination. Both parties filed motions for summary judgment. Amazon and Anchor argued that Mr. Thomas’s claims are time-barred and fail on the merits, while Mr. Thomas argued that he is entitled to judgment as a matter of law. The court split its decision into two, and addressed the four ERISA claims before tackling the two FMLA claims. Mr. Thomas’s four ERISA claims against defendants were for recovery of benefits, failure to disclose plan documents, retaliation, and breach of fiduciary duty. First, the court denied summary judgment on Mr. Thomas’s claim for recovery of benefits under Section 502(a)(1)(B) because neither party offered the plan document into the record. The court stated clearly that it could not resolve the parties’ arguments without the plan, because it could not declare the legal effect of a document it has never seen. Second, the court denied summary judgment on Mr. Thomas’s claim that Anchor failed to produce the plan document after his written request in July of 2019. The court agreed with Mr. Thomas that it appears Anchor never produced a copy of the plan. However, because the court found the arguments and evidentiary record on this claim to be underdeveloped, it decided to defer its decision about whether to impose statutory penalties, and in what amount, until the bench trial. Third, the court granted summary judgment in favor of defendants on the Section 510 retaliation claim. The court agreed with them that the claim was merely a repackaged benefit claim because Mr. Thomas offered no evidence to support his allegations of separate retaliatory conduct. “Section 1140 isn’t a substitute for a benefits claim under Section 502(a)(1)(B). And even if it were, Thomas has no evidence that Defendants denied his claims for any reason other than their belief that the claims were not covered under the terms of the Plan.” Fourth, the court granted summary judgment to defendants on Mr. Thomas’s fiduciary breach claim. It concluded that the breach of fiduciary duty claim reprised his other claims for denial of benefits and failure to disclose plan documents, and ERISA otherwise provides more specific remedies for these same injuries. The court then turned to Mr. Thomas’s FMLA interference and retaliation claims. It concluded that both claims fail for the simple fact that Mr. Thomas could not raise a genuine dispute that his September termination was caused by Amazon’s denial of his leave request. Accordingly, the court granted summary judgment in favor of defendants on Mr. Thomas’s two FMLA claims.

Seventh Circuit

Krukowski v. The Local 65 Roofers Union, No. 24-CV-1097-JPS, 2025 WL 2780295 (E.D. Wis. Sep. 30, 2025) (Judge J.P. Stadtmueller). On behalf of her minor child who was a beneficiary of a multiemployer healthcare plan, plaintiff Deborah A. Krukowski has sued the Local 65 Roofers Union, the Milwaukee Roofers’ Health Fund (“MRHF”), the Board of Trustees of the Milwaukee Roofers’ Health Fund (the “Board of Trustees”), MRHF Board of Trustees chairman Taylor Nelson, and Langer Roofing and Sheetmetal (“Langer”) for failing to give them proper notice of the termination of the child’s health insurance as required by the Consolidated Omnibus Budget Reconciliation Act (“COBRA”). Roofers Local 65, Mr. Nelson, and Langer each filed a motion to dismiss the claims against them, arguing primarily that they are not proper defendants. In this decision the court agreed, granted the motions to dismiss, and dismissed the moving defendants from the lawsuit with prejudice. Relying on the language of the governing documents of the MRHF, the court determined that the Board of Trustees is the plan administrator and plan fiduciary regarding the actions at issue. The court therefore dismissed the claims against the moving defendants, holding that Ms. Krukowski could not state claims against them for statutory penalties, fiduciary breaches, or claims for benefits because they are neither the plan nor plan administrator, and not plausibly fiduciaries regarding the mailing of the COBRA notices. The court added that its dismissal would operate with prejudice because the claims against all three defendants fail as a matter of law, and the issues could not be fixed by pleading any new or additional facts. Accordingly, Ms. Krukowski’s COBRA action will proceed only as asserted against MRHF and its Board of Trustees.

Provider Claims

Second Circuit

Da Silva Plastic & Reconstructive Surgery, P.C. v. Aetna, No. 23-cv-5482 (BMC), 2025 WL 2773102 (E.D.N.Y. Sep. 29, 2025) (Judge Brian M. Cogan). Plaintiff Da Silva Plastic and Reconstructive Surgery, P.C. is a healthcare provider alleging that Aetna Health Inc. and Aetna Health Insurance Company of New York failed to pay for medically necessary services it provided to patients enrolled in Aetna healthcare plans. This case involves 956 claims for 178 patients who received medical treatment from plaintiff. Each of those patients has one of 98 different health insurance plans issued by Aetna. Da Silva asserts claims for recovery of benefits pursuant to ERISA, as well as state law claims for breach of contract, breach of implied-in-fact contract, unjust enrichment, intentional interference with contract, and breach of contract as the intended beneficiary of contracts between Aetna and its members. Aetna moved to dismiss the complaint. As an initial matter, the court dismissed the complaint “for prolixity and vagueness,” given that the complaint failed to differentiate which of its causes of action apply to which plans, which the court viewed as “shotgun pleading.” The court instructed plaintiff to amend its complaint to identify logical groups of patients and individual patients, as well as their relevant healthcare plans. The court then assessed Aetna’s motion to dismiss on a more granular level. Aetna contends that 82 of the plans in this action are ERISA plans and 78 of those plans contain anti-assignment clauses preventing the patients from assigning their rights to recover benefits against Aetna to their healthcare providers. Da Silva tried to advance several arguments for why the court should not dismiss based on the anti-assignment provisions, but the court was not open to them. It held, “plaintiff does not include a single allegation about the contents of the anti-assignment clauses, whether they are ambiguous, or whether the plans contain exceptions to them. Accordingly, plaintiff’s argument as to the ambiguity of, or exceptions to, the anti-assignment clauses in the plans at issue is not plausibly alleged in the amended complaint, and cannot support an inference that any of the plans’ benefits were validly assigned to plaintiff.” The court also flatly rejected plaintiff’s arguments of consent and waiver. Thus, the court agreed with Aetna that the anti-assignment clauses in the 78 ERISA plans that contain them defeat plaintiff’s ERISA claim as to those plans. The court also dismissed, with prejudice, any state law causes of action as they relate to the four ERISA plans which the parties agree do not contain anti-assignment clauses, as ERISA completely preempts those causes of action. Moreover, the court declined to exercise supplemental jurisdiction over the non-ERISA plans. It doubted that the state law claims as to the non-ERISA plans arise from the same case or controversy as the provider’s claims regarding the ERISA plans. Finally, the court said it would reserve judgment on whether it would exercise supplemental jurisdiction over plaintiff’s state law claims as to the 78 ERISA plans that contain anti-assignment clauses until it determines whether plaintiff’s ERISA claims as to those plans will go forward. Thus, the court dismissed plaintiff’s complaint, in part with prejudice, in part without, and instructed the provider to amend its complaint in line with these rulings.

Severance Benefit Claims

Third Circuit

Kotok v. A360 Media, LLC, No. 22-4159, 2025 WL 2808545 (D.N.J. Oct. 2, 2025) (Judge Jamel K. Semper). This litigation concerns the severance benefits of plaintiff Steven Kotok. Mr. Kotok was the former Chief Executive Officer and President of Bauer Media Group USA, LLC, which was acquired by A360 Media in 2022. In this order the court resolved the parties’ dispute over the appropriate award of severance benefits under their employment contract. Although the court determined that the language of the agreement was ambiguous, and that both plaintiff’s and defendants’ interpretations were plausible, the court found that extrinsic evidence demonstrating the intent of the parties supported defendants’ reading. The employers pointed to the negotiation history and conduct of the parties as evidence of their intent to provide Mr. Kotok with six months of base salary and his annual bonus as severance. The court agreed that upon consideration of this evidence there could be no question that this was what was agreed upon and that the parties never intended to agree upon twelve months of salary and twelve times annual bonus. “The evidence of the parties’ mutual understanding while negotiating (1) the Contract itself and (2) the acquisition of Bauer overwhelmingly favors Defendants’ interpretation of the clause.” Accordingly, the court ruled that Mr. Kotok is entitled to severance benefits totaling $405,849.31, and entered judgment accordingly. The court rejected the employers’ attempts to avoid severance payments altogether. They argued that “Plaintiff’s unclean hands and bad faith preclude him from recovering any severance,” but the court could not agree. It was similarly unpersuaded that Mr. Kotok was not entitled to severance payments for failure to satisfy some of the conditions of the contract. Thus, while the court entered summary judgment in defendants’ favor on their interpretation of the severance benefit amount, it rejected their remaining defenses. As a result, the employers are liable to Mr. Kotok in the amount of $405,849.31 in severance as outlined in the contractual language of their employment agreement.

Statute of Limitations

Sixth Circuit

Saginaw Chippewa Indian Tribe of Mich. v. Blue Cross Blue Shield of Mich., No. 1:16-cv-10317, 2025 WL 2777569 (E.D. Mich. Sep. 29, 2025) (Judge Thomas L. Ludington). Plaintiff Saginaw Chippewa Indian Tribe of Michigan operates two healthcare plans: an ERISA-governed plan for Tribal employees, and a non-ERISA plan for Tribe members. Both plans are administered by defendant Blue Cross Blue Shield of Michigan. The administration of these two healthcare plans is at the center of this litigation. Plaintiffs alleged that Blue Cross was charging hidden fees and was violating its ERISA fiduciary duties and state law by failing to demand Medicare-like rates from medical service providers. This longstanding case has a complicated procedural history, including two remand decisions from the Sixth Circuit. (Your ERISA Watch covered one of those rulings as our case of the week in our September 3, 2018 edition.) At issue here was Blue Cross’s motion for summary judgment involving the Medicare-like rate claims. The court granted the motion on statute of limitations grounds. Regarding the ERISA fiduciary breach claims, the court agreed with Blue Cross that there was no question plaintiff had actual knowledge of Blue Cross’s fiduciary breach as of 2008 at the latest, meaning the three-year statute of limitations outlined in 29 U.S.C. § 1113(2) had run by 2011, well before plaintiffs commenced this litigation in 2016. Testimony from Tribe personnel demonstrated to the court that the Tribe was aware both that Blue Cross was failing to determine Medicare-like rates from the beginning, and also that it did not even have a system to process the government rates. In a case almost identical to this one, brought by another Tribe against Blue Cross, the Sixth Circuit found “that the only ‘relevant fact’ in determining when the statute of limitations began to run was ‘[Blue Cross’s]’ failure to pursue [Medicare-like rate] discounts’ because it formed the basis of Grand Traverse Band’s ERISA claims.” Similarly here, Blue Cross’s alleged failure to pursue Medicare-like rates formed the basis of the Tribe’s ERISA claims. As a result, the Tribe’s knowledge that Blue Cross was not negotiating Medicare-like rates doomed their ERISA claims. Moreover, the court rejected the Tribe’s allegations of fraud or concealment. It stated that the only fraud the Tribe could identify occurred in 2009, which was at least one year after it had actual knowledge that the insurer was not obtaining Medicare-like rates. Thus, the court wrote that Blue Cross “could not have engaged in fraud to conceal from the Tribe what the Tribe already knew.” For this reason, the court concluded that the ERISA fiduciary breach claims were time-barred. And for much the same reason, the court found the common law fiduciary duty claim also failed because the statute of limitations has run. Michigan’s three-year statute of limitations for claims involving fiduciary duties has a more lenient standard (“knew or should have known”) than ERISA’s “actual knowledge” standard. Because the court determined that plaintiff’s claims failed under ERISA’s stricter statute of limitations, it naturally found that their claims also failed under Michigan law. Finally, the court granted summary judgment to Blue Cross on plaintiff’s state law False Claims Act claim, as the Sixth Circuit has held that governing Medicare-like rate regulations under 42 C.F.R. § 136.30 only apply to Medicare-participating hospitals. Thus, the court agreed with Blue Cross that the Tribe could not allege a violation of the False Claims Act under a theory that Blue Cross failed to pay claims at Medicare-like rates. Based on the foregoing, the court entered summary judgment in favor of Blue Cross on all of the Tribe’s claims, and dismissed the case with prejudice.