Smith v. Board of Directors of Triad Mfg., Inc., No. 20-2708, __ F.4th __, 2021 WL 4129456 (7th Cir. Sept. 10, 2021) (Before Circuit Judges Kanne, Brennan, and Scudder).

Arbitration is a hot issue in ERISA. Can claims for relief under ERISA be forced into arbitration, and if so, when? In this case the Seventh Circuit has good news and bad news for litigants on both sides.

The case is a putative class action brought by James Smith, an employee of Triad Manufacturing, Inc., alleging that in 2015 Triad and related defendants mismanaged Triad’s ERISA-governed employee stock ownership plan. Specifically, Smith alleged that three members of the board of directors created the plan and sold all of Triad’s stock to the plan, which then plummeted in value. The directors, however, profited from the transaction by providing loans to the plan that required repayment, regardless of Triad’s financial situation. In 2018, defendants amended the plan to include an arbitration provision with a class action waiver that prohibited claimants from seeking a remedy “which has the purpose or effect of providing additional benefits or monetary or other relief to any Eligible Employee, Participant or Beneficiary other than the Claimant.” Continue Reading Arbitration Provision That Prevents Plan-Wide Relief Unenforceable

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

Attorneys’ Fees

Ninth Circuit

Hoffman v. Screen Actors Guild-Producers Health Plan, No. 2:10-CV-06913-CJC-E, 2021 WL 3888251 (C.D. Cal. Aug. 23, 2021) (Judge Cormac J. Carney). Plaintiff filed suit in 2010. Two prior fee decisions awarded $185,670 and $246,890 in attorneys’ fees. In the current motion, following a Ninth Circuit decision vitiating several prior rulings from the district court, the reopening of the case, and a settlement, plaintiff sought an additional $69,150 in fees for 92.2 hours of work at a rate of $750 per hour. The court found that $750 per hour was reasonable for an attorney admitted in 1970, who had handled over 200 ERISA cases, and been named a “Southern California Super Lawyer” in the field of ERISA every year since 2006. The court also found time was appropriately expended on prior unsuccessful motions that had advanced arguments subsequently adopted by the Ninth Circuit. It also awarded fees based on time spent on preparing the fee motion and time for a motion that was withdrawn but became the foundation for a Ninth Circuit brief. However, the court denied fees for time spent on prior unsuccessful motions it deemed completely devoid of any legal authority. In the end, the court awarded 60.3 hours, at a rate of $750 per hour, for a total award of $45,225 in additional attorneys’ fees (bringing the total fees awarded in the case to $477,785). Plaintiff has appealed the decision, continuing the more than decade-long saga.

Continue Reading Your ERISA Watch – Week of September 8, 2021

Williams v. Unum Life Ins. Co. of Am., No. 20-1694, __ F.4th __, 2021 WL 3729660 (8th Cir. Aug. 24, 2021) (Before Circuit Judges Smith, Arnold, and Stras).

Ever since the Supreme Court’s 1989 decision in Firestone Tire & Rubber v. Bruch, ERISA-governed benefit plans and their insurers have sought to grant themselves discretionary authority in order to ensure a favorable standard of review in court.

Continue Reading Eighth Circuit Rules Maine’s Anti-Discretion Law Does Not Apply to Accident Policies