This week’s notable decision, Perrone v. Johnson & Johnson, et al., No. CV 19-00923 (FLW), 2020 WL 2060324 (D.N.J. Apr. 29, 2020), is a case involving allegations of investing in company stock when corporate insiders knew, and actively concealed, its talc powder (baby powder) contains asbestos. This is yet another case dismissed for failing to meet the high pleading standard set by the Supreme Court in Fifth Third Bancorp v. Dudenhoeffer, 573 U.S. 409 (2014).

Plaintiffs filed this as a purported class action against Johnson & Johnson, Peter Fasolo and Dominic Caruso, senior executives of the company and members of the benefits committee. Plaintiffs complaint alleges that as early as 1957, Johnson & Johnson knew its talc powder contains asbestos and not only concealed its knowledge for decades but engaged in an active campaign of providing misinformation and misleading statements about the safety of its product. However, in December 2018, Reuters published an article revealing the long history of actively hiding the presence of asbestos in its talc powder. The news article caused Johnson & Johnson’s stock to decline by more than 10%.  Continue Reading Johnson & Johnson Escapes Breach of Fiduciary Duty Lawsuit Due to Dudenhoeffer’s Difficult Pleading Standard

Good morning, ERISA Watchers! There were no notable circuit court decisions from this past week, so exercising some editorial discretion, this week’s notable decision is a firm victory in a discovery dispute involving a self-funded long-term disability plan, Chacko v. AT&T Umbrella Benefit Plan No. 3, No. 2:19-CV-01837-JAM-DB, 2020 WL 1984171 (E.D. Cal. Apr. 27, 2020). 

Before going into the decision, I want to take a step back to discuss the Ninth Circuit’s decision in Demer v. IBM Corporation LTD Plan, 835 F.3d 893 (9th Cir. 2016). Demer alleged that there was (1) a structural conflict of interest since MetLife both decided claims for the disability plan and was responsible for paying those claims; and (2) at least two of the doctors that MetLife hired to review the medical records “have performed a significant number of reviews for MetLife and have received significant compensation for their services.” Demer, 835 F.3d at 900. The court then analyzed these two areas of conflict separately: the structural conflict of interest and the financial conflict of independent physician consultants. Id. at 900-903. Continue Reading Courts Find Discovery of Independent Physician Consultants’ Financial Conflict Permissible in Absence of Structural Conflict

Good morning, ERISA Watchers! This was a slow week in the circuit courts for ERISA decisions so this week’s notable decision is the unpublished decision in Strickland v. AT&T Pension Benefit Plan, No. 18-15336, __F.App’x__, 2020 WL 1873358 (9th Cir. Apr. 15, 2020). 

Plaintiff Vanmark Strickland appealed a district court ruling upholding the denial of his claim for pension disability benefits under the AT&T Pension Benefit Plan (“the Plan”). The Plan is administered by Sedgwick Claims Management Services, which operates as AT&T Integrated Disability Service Center (“IDSC”). The district court reviewed the benefits decision applying an abuse of discretion standard of review.  Continue Reading Ninth Circuit Upholds Denial of Pension Disability Benefits Under AT&T Pension Benefit Plan