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

Attorneys’ Fees

Third Circuit

Cunningham v. Wawa, Inc., No. CV 18-3355, 2021 WL 1626482 (E.D. Pa. Apr. 21, 2021) (Judge Paul S. Diamond). Plaintiffs are former employees of Wawa who participated in the Company’s Employee Stock Ownership Plan (“ESOP”), by which Wawa shares are allocated to individual Plan participants. Before 2014, the ESOP’s written instrument provided that former employees were entitled to retain ownership of their Wawa stock until age 68. In 2014, Wawa amended the ESOP and instructed the Trustee to “liquidate the ESOP Stock held in the ESOP Stock Account of any Participant who terminates employment with the Company and all Affiliated Companies on or after January 1, 2015.” Wawa amended the ESOP again in 2015, directing the Trustee to liquidate shares for participants who had terminated employment or retired before January 1, 2015. Plaintiffs contend that these forced sales violated ERISA, and that Defendants undervalued the Wawa stock (which is not publicly traded) when compensating former ESOP participants for their shares. The parties now seek approval of settlement and plaintiffs’ attorney fees. The court approved both requests, ordering defendants to pay $21,612,500 to the Class (an estimated $500 per share), up to 20% of the award amount and $175,000 for litigation expenses to Class Counsel, and a $25,000 incentive award to each Class Representative. The court also approved the parties’ agreement that defendants pay settlement administration costs, including the costs of the independent fiduciary retained to review the settlement. In all, the court also awarded $4,322,500 in fees, and $153,851.05 in costs. Continue Reading Your ERISA Watch – Week of May 5, 2021

Gustafson-Feis v. Reliance Standard Life Ins. Co., No. C20-5336 BHS, ___F Supp. ___, WL 1561690, at *1 (W.D. Wash. Apr. 21, 2021) (Judge Benjamin Settle).

This week’s notable decision is a victory for the plaintiff, represented by Kantor & Kantor, in the Western District of Washington. It revolves around how an insurer determines whether a claim is barred by a pre-existing condition.  Plaintiff Lisa Gustafson-Feis had been hit by car in 2016, breaking several bones in her pelvis and sacrum. She worked for Microsoft, contracted through different employers. Her role required regular international travel and often moving heavy displays. She had multiple surgeries in 2016 to fix her spine and pelvis, went to physical therapy, and was released by her doctor in December 2017 to work full time with no restrictions. Continue Reading An Insurer Can’t Just Say It’s So for Purposes of a Pre-Existing Condition Exclusion

Bafford v. Northrop Grumman Corporation, No. 20-55222, __ F.3d ___, 2021 WL 1419055 (9th Cir.  2021) (Before Boggs, Smith, and Murguia, Circuit Judges).

This week’s notable decision is a significant Ninth Circuit victory for pension plan participants represented by attorneys from Kantor & Kantor, LLP, and Renaker Hasselman and Scott LLP.  In this published decision, the Ninth Circuit clarified that ERISA does not preempt state-law negligence claims against the plan’s third-party administrator, Hewitt, for its carelessness in miscalculating plan benefits. The court also ruled that online requests for pension benefit statements may constitute “written requests” for benefit statements for purposes of ERISA Section 105, 29 U.S.C. § 1025. The decision was not a complete victory for the participants, however, as the Ninth Circuit also concluded that the miscalculation of benefits by Hewitt involved ministerial and not fiduciary functions, and therefore none of the defendants could be held liable for fiduciary breach under ERISA based on Hewitt’s miscalculations. Continue Reading Pension Plan Service Providers and Administrators May Be Liable for Misstated Benefits, Even Though Miscalculations Are Not Fiduciary Breaches