- Volume 17, Issue #2
- Majority Won't Reconsider Denial Of States' Motion To Intervene In Dispute With DOL
NEW ORLEANS - A majority of the Fifth Circuit U.S. Court of Appeals on May 22 denied a motion by California, New York and Oregon to reconsider their motion to intervene in a majority ruling that reversed a Texas federal court's decision rejecting business groups' challenges of the U.S. Department of Labor's "fiduciary rule" and vacated the rule in toto (Chamber of Commerce of the United States of America, et al. v. United States Department of Labor, et al., American Council of Life Insurers, et al. v. United States Department of Labor, et al., Indexed Annuity Leadership Council, et al. v. R. Alexander Acosta, et al., No. 17-10238, 5th Cir.).
- Department Of Labor Announces Temporary Enforcement Policy As To 'Fiduciary Rule'
WASHINGTON, D.C. - Following a majority of the Fifth Circuit U.S. Court of Appeals' ruling that vacated the U.S. Department of Labor's 2016 "fiduciary rule," the DOL on May 7 issued Field Assistance Bulletin No. 2018-02, announcing a temporary enforcement policy related to its rule defining who is a "fiduciary" under the Employee Retirement Income Security Act, the Internal Revenue Code and associated prohibited transaction exemptions, noting that this "temporary enforcement relief is appropriate and in the interest of plans, plan fiduciaries, plan participants and beneficiaries, IRAs, and IRA owners."
- 9th Circuit: Company Must Assume Unpaid Withdrawal Liability Of Its Predecessor
PASADENA, Calif. - The Ninth Circuit U.S. Court of Appeals on June 1 held that a company must assume its predecessor's unpaid withdrawal liability to a multiemployer pension plan because it was on constructive notice of potential withdrawal liability, reversing a lower court's ruling (Heavenly Hana LLC, et al. v. Hotel Union & Hotel Industry of Hawaii Pension Plan, No. 16-15481, 9th Cir., 2018 U.S. App. LEXIS 14509).
- Citing Ambiguity, Factual Disputes, 6th Circuit Remands Retirement Plan Case
CINCINNATI - The Sixth Circuit U.S. Court of Appeals on May 10 weighed in on a longstanding dispute between retirees and their retirement plan, writing that because it "cannot discern the contours of the parties' intent" from plan language relating to early retirement reductions for post-2004 retirees, a summary judgment that the plan is unambiguous must be vacated (Elizabeth A. Clemons, et al. v. Norton Healthcare Inc Retirement Plan, Nos. 16-5063, -5124, 6th Cir., 2018 U.S. App. LEXIS 12226).
- 3rd Circuit Affirms Retiree Medical Benefits Properly Terminated
PHILADELPHIA - A Pennsylvania federal judge did not err in granting a retirement plan summary judgment on allegations that it breached its fiduciary duty when ending medical benefits for a retiree who violated a plan provision relating to continued work in the construction industry, the Third Circuit U.S. Court of Appeals ruled May 7 (John D. Bickhart v. Carpenters Health and Welfare Fund of Philadelphia and Vicinity, No. 17-2834, 3rd Cir., 2018 U.S. App. LEXIS 11888).
- Panel Refuses To Allow Retirement Plan's Appeal Of Class Certification Order
CINCINNATI - The Sixth Circuit U.S. Court of Appeals on May 23 denied a petition to appeal filed by a retirement benefits plan after determining that the plan failed to prove how a district court abused its discretion in certifying two subclasses in a suit alleging that the plan violated the Employee Retirement Income Security Act by depriving plan participants of certain vested rights (In re: Arkema Inc., Arkema Inc. Retirement Benefits Plan, No. 18-0502, 6th Cir., 2018 U.S. App. LEXIS 13720).
- Federal Judge Vacates Summary Judgment Ruling Against Retirement Plan Defendants
HARRISBURG, Pa. - A Pennsylvania federal judge on May 7 vacated the denial of summary judgment entered against retirement plan defendants in a breach of fiduciary suit after determining that pursuant to the precedent of the Third Circuit U.S. Court of Appeals, the defendants did not breach a fiduciary duty by failing to correct a retirement plan participant's misunderstanding of changes to the retirement plan because the plan participant's misrepresentation claim was based on statements made to her before any plan changes were under serious consideration (Daria Kovarikova v. Wellspan Good Samaritan Hospital, et al., No. 15-2218, M.D. Pa., 2018 U.S. Dist. LEXIS 76433).
- Settlement Class Certified, Settlement Preliminarily Approved In ESOP Suit
PHILADELPHIA - A Pennsylvania federal judge on May 1 conditionally certified a settlement class and preliminarily approved a $25 million settlement payment to an employee stock ownership plan (ESOP), allocated on a pro rata basis among 2,300 class members, in a suit alleging that an amendment to the ESOP was a breach of fiduciary duty under the Employee Retirement Income Security Act (Greg Pfeifer, et al. v. Wawa Inc., et al., No. 16-497, E.D. Pa., 2018 U.S. Dist. LEXIS 81759).
- Split 4th Circuit Upholds Ruling For Bank On Accounting-For-Profit Claim
RICHMOND, Va. - A divided Fourth Circuit U.S. Court of Appeals panel on June 5 upheld a district court judgment holding that employees in a decade-long case over a bank's illegal transfer of assets from a 401(k) plan to an Employee Retirement Income Security Act pension plan failed to show that any profit was retained by the bank as a result of the transfer (William L. Pender, et al. v. Bank of America Corp., et al., No. 17-1485, 4th Cir., 2018 U.S. App. LEXIS 15088).
- Panel Refuses To Reconsider If Amendment To Pension Plan Violated Anti-Cutback Rule
CHICAGO - The Seventh Circuit U.S. Court of Appeals on May 10 rejected a petition to reconsider its finding that an amendment to a pension plan's calculation of retirement income credits does not violate the Employee Retirement Income Security Act's anti-cutback rule (James P. Teufel v. The Northern Trust Co., et al., Nos. 17-1676, 17-1677, 7th Cir.).
- Equity Growth Plan Not Subject To ERISA, 9th Circuit Panel Affirms
PORTLAND, Ore. - The Ninth Circuit U.S. Court of Appeals on May 31 affirmed a district court's ruling that a company's equity growth plan was not a defined contribution plan subject to the requirements of the Employee Retirement Income Security Act because the primary purpose of the plan was not to provide retirement benefits but to encourage longevity of employment to select employees (Jim Miller v. Eric Olsen, et al., No. 16-35717, 9th Cir., 2018 U.S. App. LEXIS 14372).
- High Court Should Deny Review Of Ruling On ERISA's Limitation Of Action Provision
WASHINGTON, D.C. - The U.S. Supreme Court should deny a petition for writ of certiorari filed by a retirement plan trustee because the trustee waived the right to assert a timeliness defense under Section 1113(1) of the Employee Retirement Income Security Act and because the 11th Circuit U.S. Court of Appeals did not err in finding that Section 1113(1) is subject to express waiver even though it is a statute of repose as opposed to a statute of limitations, the U.S. secretary of the Labor says in a May 21 response to the petition (Robert N. Preston, et al. v. Secretary, U.S. Department of Labor, No. 17-1328, U.S. Sup.).
- New York Federal Judge: Ruling In NYU ERISA Suit Not Immediately Forthcoming
NEW YORK - In a May 23 order, a federal judge in New York indicated that she will not issue a ruling in a dispute between New York University (NYU) and members of the NYU Retirement Plan before the commencement of a June criminal trial in her courtroom (Dr. Alan Sacerdote, et al. v. New York University, No. 16-6284, S.D. N.Y.).
- $6.5M University Settlement Of Retirement Plan Options Suit Preliminarily Approved
CHICAGO - An Illinois federal judge on May 23 granted preliminary approval of a $6.5 million class settlement to be paid by the University of Chicago to end a lawsuit alleging that it violated the Employee Retirement Income Security Act by imprudently selecting and maintaining certain investment options (Winifred J. Daugherty, et al. v. The University of Chicago, No. 17-3736, N.D. Ill.).
- Fiduciary Duty Claims Levied Against University Plan Dismissed In Illinois
CHICAGO - Purported class action allegations by five plaintiffs that their retirement plan engaged in prohibited transactions under the Employee Retirement Income Security Act, 29 U.S.C. 1132(a)(2), 1109(a), were dismissed May 25 by an Illinois federal judge, who found not only that the plaintiffs paid reasonable fees, but also that plan participants retained control over how their money was invested (Laura L. Divane, et al. v. Northwestern University, et al., No. 16-8157, N.D. Ill., 2018 U.S. Dist. LEXIS 87645).
- Judge Strikes Some Of Plan Administrator's Affirmative Defenses In Class Action Suit
SEATTLE - A Washington federal judge on May 18 partially granted a plaintiff's motion to strike a 403(b) plan administrator's affirmative defenses in a putative class action lawsuit alleging breach of fiduciary duties under the Employee Retirement Income Security, but allowed the affirmative defense under ERISA's safe-harbor provision to stand (Jenny Johnson, et al. v. Providence Health & Services, et al., No. 17-1779, W.D. Wash., 2018 U.S. Dist. LEXIS 84108).
- 8th Circuit Set To Hear Appeal Over Wells Fargo's Proprietary Target Date Funds
ST. PAUL, Minn. - An Eighth Circuit U.S. Court of Appeals panel on June 13 is set to hear oral arguments in the appeal of a class action by a plan participant who has accused high level officers and directors of Wells Fargo & Co. of breaching their fiduciary duties under the Employee Retirement Income Security Act by failing to replace a proprietary Wells Fargo Target Date Funds (Wells Fargo TDFs) when cheaper and better performing funds were available (John Meiners, et al. v. Wells Fargo & Company, et al., No. 17-2397, 8th Cir.).
- Widow Refutes United States' Request To Deny Her Appeal Of ERISA Benefits Dispute
WASHINGTON, D.C. - A petitioner on June 1 responded to the government's amicus curiae brief opining that the U.S. Supreme Court should deny her request seeking a determination of which section of the Employee Retirement Income Security Act a claim for breach of fiduciary duty may be filed under, contending that if the high court denies review, plan participants who live and work within the boundaries of the Sixth Circuit U.S. Court of Appeals "face an indefensible pleading standard that robs them of an important statutory cause of action and stands at odds with the rest of the country" (Jennifer Strang v. Ford Motor Company General Retirement Plan, et al., No. 17-528, U.S. Sup.).
- Plan Participants Fail To State Claim for Breach Of Duty To Diversify, Judge Says
HOUSTON - A Texas federal judge on May 9 granted a motion to dismiss filed by the defendants in a class action alleging that a retirement plan breached its duty to diversify and its duty of prudence following a spinoff of the company because the plan did not mandate that the participants' assets remain in specific stock funds created following the spinoff (Jeffery Schweitzer et al., v. The Investment Committee of the Phillips 66 Savings Plan et al., No. 17-3013, S.D. Texas, 2018 U.S. Dist. LEXIS 77788).
- Deutsche Bank Awarded Partial Summary Judgment Over Alleged ERISA Violations
NEW YORK - A federal judge in New York on June 6 awarded partial summary judgment to Deutsche Bank Americas Holding Corp. and its co-defendants on allegations that they violated the Employee Retirement Income Security Act by engaging in prohibited transactions when overseeing a 401(k) plan, finding that there was no evidence that a different, more expensive class of funds was offered to members of the plan compared to those offered to other shareholders (Ramon Moreno v. Deutsche Bank Americas Holding Corp., et al., No. 15 Civ. 9936, S.D. N.Y., 2018 U.S. Dist. LEXIS 95324).
- Missouri Federal Judge: Fund Sponsorship Of Plan Does Not Convert Fees To Assets
KANSAS CITY, Mo. - In three separate orders issued May 22, a Missouri federal judge partly granted a retirement plan summary judgment on allegations that it engaged in transactions prohibited by the Employee Retirement Income Security Act, 29 U.S.C. 1001 et seq., but denied requests by the plan to exclude the testimony of two expert witnesses for plan participant plaintiffs (Steve Wildman, et al. v. American Century Services LLC, et al., No. 4:16-cv-00737, W.D. Mo., 2018 U.S. Dist. LEXIS 85504, 2018 U.S. Dist. LEXIS 85508, 2018 U.S. Dist. LEXIS 85505).
- Post-Argument, Defendants In ERISA Case Cite Epic As Supplemental Authority
SAN FRANCISCO - Less than two weeks after oral arguments, defendants in a class action lawsuit over allegedly excessive fees charged in connection with a 403(b) retirement plan on May 24 filed a letter with the Ninth Circuit U.S. Court of Appeals, citing the May 21 ruling by the U.S. Supreme Court in Epic Systems Corp. v. Lewis as supplemental authority in support of their position that the allegations should be resolved on an individual basis (Allen L. Munro, et al. v. University of Southern California, et al., No. 17-55550, 9th Cir.).
- 9th Circuit: Mental Health Law Mandates Inpatient Room And Board Coverage
SAN FRANCISCO - Health insurance plans covering room and board for medical and surgical procedures must do so for inpatient mental health stays as well under federal law, a Ninth Circuit U.S. Court of Appeals panel held June 6 in reinstating an Employee Retirement Income Security Act action (Danny P., et al. v. Catholic Health Initiatives, No. 16-35609, 9th Cir.).
- Majority: CBAs Unambiguously Do Not Provide For Lifetime Retiree Health Care Benefits
CINCINNATI - A majority of the Sixth Circuit U.S. Court of Appeals on June 8 reversed a lower court's finding that plaintiffs satisfied their burden of proving that Honeywell International Inc. agreed to provide lifetime health care benefits to retirees from its Greenville, Ohio, plant, concluding that a series of collective bargaining agreements (CBAs) unambiguously do not provide for lifetime retiree health care benefits and the lower court erred in permanently enjoining the company from dropping the benefits for those who retired from the plant before June 1, 2012, and their eligible spouses and dependents (Barbara Fletcher, et al. v. Honeywell International, Inc., No. 17-3277, 6th Cir., 2018 U.S. App. LEXIS 15469).
- Panel Says Benefits Are Owed For Amputation Caused By Auto Accident
SAN FRANCISCO - The Ninth Circuit U.S. Court of Appeals on May 16 reversed a district court's ruling that no benefits are owed under an accidental dismemberment plan after determining that the plan participants met their burden of proving that the amputation of a participant's leg was caused solely by an auto accident and that the participant's diabetes did not substantially cause or contribute to the amputation (Tommy Dowdy et al., v. Metropolitan Life Insurance Co., No. 16-15824, 9th Cir., 2018 U.S. App. LEXIS 12648).
- U.S. Supreme Court Won't Hear ERISA Appeal Over Out-Of-Network Services
WASHINGTON, D.C. - The U.S. Supreme Court on May 14 denied a petition for writ of certiorari filed by an out-of-network health care provider denied coverage by an Employee Retirement Income Security Act administrator for more than $11 million in claims that was seeking a ruling on two ERISA-related issues (Humble Surgical Hospital, LLC v. Connecticut General Life Insurance Company, et al., No. 17-1325, U.S. Sup., 2018 U.S. LEXIS 3013).
- Appellees Say Dismissal Of Class Claims Over PBM's Pricing Should Be Affirmed
NEW YORK - A New York federal judge correctly dismissed Employee Retirement Income Security Act claims against the largest pharmacy benefits manager (PBM) and a health insurance provider over prescription pricing because the plaintiffs failed to prove that the health insurance provider and the PBM owed any fiduciary duty to the plaintiffs, the appellees maintain in two separate briefs filed in the Second Circuit U.S. Court of Appeal on May 30 (In re Express Scripts/Anthem ERISA Litigation, No. 18-346, 2nd Cir.)
- Amici Warn Of Domino Effect, Higher Health Costs If ERISA Preemption Ruling Stands
WASHINGTON, D.C. - An Oklahoma Supreme Court ruling finding an insured's suit against a provider outside ERISA's preemption powers could topple the first domino in a chain leading to higher prices for health care generally, an amicus curiae group warns the nation's top court in a June 4 brief urging it to review the ruling (INTEGRIS Health Inc. v. Elizabeth Cates, et al., No. 17-1501, U.S. Sup.).
- Health Plan Provider Says Treatment Services Were Properly Terminated
BOSTON - The First Circuit U.S. Court of Appeals should affirm a district court's decision in favor of a health insurance plan that refused to reimburse a plan participant for residential treatment services for schizoaffective disorder because the evidence shows that the treatment was not medically necessary, the plan argues in a May 16 brief (Jane Doe v. Harvard Pilgrim Health Care Inc. et al., No. 17-2078, 1st Cir.).
- 3rd Circuit: Anti-Assignment Provision Bars ERISA Health Insurance Suit
PHILADELPHIA - Anti-assignment provisions in health insurance contracts are enforceable and bar a provider's Employee Retirement Income Security Act suit, the Third Circuit U.S. Court of Appeals held May 16 (American Orthopedic & Sports Medicine v. Independence Blue Cross Blue Shield, et al., No. 17-1663, 3rd Cir.).
- 8th Circuit Affirms: Arkansas PBM Regulations Preempted By ERISA
ST. LOUIS - An Arkansas federal judge did not err in deeming a 2015 state law that governs the conduct of pharmacy benefits managers (PBMs) preempted by the Employee Retirement Income Security Act, the Eighth Circuit U.S. Court of Appeals ruled June 8 (Pharmaceutical Care Management Association v. Leslie Rutledge, Nos. 17-1609, -1629, 8th Cir., 2018 U.S. App. LEXIS 15487).
- High Court Will Not Review Whether ERISA Preempts Slayer Statute
WASHINGTON, D.C. - The U.S. Supreme Court on June 11 denied a petition for writ of certiorari of a lower court decision that held that a woman who was found not guilty of killing her husband by reason of insanity could not collect her deceased husband's pension benefits (Laborers' Pension Fund, et al. v. Anka V. Miscevic, 17-1493, U.S. Sup.).
- U.S. Government Says Challenge To Church Plan Exemption Must Be Rejected
ORLANDO, Fla. - A district court should reject a plaintiff's challenge to the constitutionality of the Employee Retirement Income Security Act's church plan exemption because the exemption meets the requirements of the establishment clause of the First Amendment to the U.S. Constitution, the U.S. government argues in a May 11 brief filed in a class action suit alleging that an employer's retirement plans do not qualify as church plans under ERISA (Donna Sheedy, et al. v. Adventist Health System Sunbelt Healthcare Corp. et al., No. 16-1893, M.D. Fla.).
- High Court Refuses To Grant Life Insurer's Petition In ERISA Beneficiary Dispute
WASHINGTON, D.C. - The U.S. Supreme Court on June 11 denied a life insurer's petition for writ of certiorari challenging a lower court's finding that a divorce decree suffices as a qualified domestic relations order (QDRO) that "clearly specifies" a decedent's daughter as the beneficiary under the Employee Retirement Income Security Act (Sun Life Assurance Company of Canada v. Richard E. Jackson, et al., No. 17-1247, U.S. Sup.).
- 4th Circuit Affirms Ruling In Life Insurer's Favor In Supplemental Coverage Suit
RICHMOND, Va. - The Fourth Circuit U.S. Court of Appeals on May 15 held that no reasonable jury could find that a life insurer had a fiduciary duty under the Employee Retirement Income Security Act to solicit supporting materials for coverage beyond the guaranteed issue amount or notify new employees that they had not completed the evidence of insurability requirement, affirming a lower federal court's summary judgment ruling in favor of the insurer (Kimberly P. Gordon v. Cigna Corporation, et al., No. 17-1188, 4th Cir., 2018 U.S. App. LEXIS 12568).
- District Court Correctly Dismissed Disability Claimant's Suit, Panel Says
SAN FRANCISCO - A district court did not abuse its discretion in dismissing a disability claimant's amended complaint because the prelitigation costs and attorney fees sought by the claimant are not available as equitable relief under the Employee Retirement Income Security Act, the Ninth Circuit U.S. Court of Appeals said May 31 (Larry A. Benson v. Life Insurance Company of North America, No. 17-55253, 9th Cir., 2018 U.S. App. LEXIS 14367).
- Issues Of Fact Exist As To Whether Disability Insurer Properly Denied Claim
SAN FRANCISCO - The Ninth Circuit U.S. Court of Appeals on May 31 reversed a district court's ruling in favor of a disability insurer after determining that genuine issues of fact exists regarding whether the insurer improperly denied the claim before the amount of time to submit additional materials had expired (Narciso Cuaresma Jr. v. Farmers Group Disability Income Plan, et al., No. 16-16946, 9th Cir., 2018 U.S. App. LEXIS 14368).
- Former NFL Player Files Class Action, Alleges Plan Breached Fiduciary Duties
NEW YORK - A former National Football League player on May 22 filed suit in New York federal court, alleging that the NFL's retirement plan and its fiduciaries duty violated the Employee Retirement Income Security Act by refusing to reclassify players' disability benefits as football degenerative (FD) benefits despite evidence showing that the disabilities suffered by players were caused by numerous hits to the head and concussions sustained while playing in the NFL (Christopher Hudson, et al., v. National Football League Management Council, et al., No. 18-4483, S.D. N.Y.).
- High Court's Review Of 9th Circuit's Offset Ruling Not Warranted, Plan Says
WASHINGTON, D.C. - The U.S. Supreme Court should deny a disability claimant's petition for writ of certiorari in a dispute over the offsetting of a claimant's long-term disability (LTD) benefits to account for Social Security disability income (SSDI) benefits received on behalf of the claimant's dependents because the plan administrators applied the language of the LTD plan as written, the defendants maintain in a May 25 response brief (Susan Rene Jones v. Merck Sharpe & Dohme Corp., et al., No. 17-1478, U.S. Sup.).
- ERISA Prohibited Transaction Claims Alleged Against Disability Insurer Dismissed
WASHINGTON, D.C. - A District of Columbia federal judge on June 6 dismissed claims alleging that a short-term disability (STD) insurance provider violated the Employee Retirement Income Security Act by engaging in prohibited transactions after determining that the plan's trustees failed to prove that the insurer engaged in any transactions that are prohibited under ERISA (Joseph Sellers Jr., et al., v. Anthem Life Insurance Co., No. 16-2428, D. D.C., 2018 U.S. Dist. LEXIS 95278).
- Disability Claimants Seek High Court's Review Of Service-Of-Suit Ruling
WASHINGTON, D.C. - The U.S. Supreme Court should grant a petition for writ of certiorari because the Colorado Supreme Court's dismissal of two long-term disability insurance lawsuits based on the failure to serve the proper parties has widened an existing conflict between federal courts of appeal regarding whether a benefit plan governed by the Employee Retirement Income Security Act is a proper defendant, the petitioners argue in their May 11 brief filed in the high court (Brenda Olivar v. Public Service Employee Credit Union Long Term Disability Plan, and Caroline Burton, et al. v. Colorado Access, et al., No. 17-1543, U.S. Sup., 2018 U.S. S. Ct. Briefs LEXIS 1932).