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ERISA Watch – April 26, 2016

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This week’s notable decision is Estate of Barton v. ADT Sec. Services Pension Plan, No. 13-56379, 2016 WL 1612755, (9th Cir. Apr. 21, 2016). In this case, the pension plan administrator denied Bruce Barton’s request for pension benefits because it determined that Barton did not prove he was entitled to a pension because he could not document that he worked 1000 hours or more for each of the nearly twenty years he was employed by ADT and its affiliates, or that his employers participated in the Plans. After a bench trial, the district court determined that the administrator did not abuse its discretion in denying Barton pension benefits. It also declined to award Barton statutory penalties for the administrator’s failure to comply with ERISA’s disclosure obligations since he lacked standing to assert a disclosure violation as he had no colorable claim to pension benefits. The Ninth Circuit Court of Appeals reversed the district court’s judgment. The Court held that the district court incorrectly placed the burden of proof on Barton for matters within Defendants’ control. The court explained that Defendants are in a far better position to ascertain whether an entity was a participating employer. Instead, if Barton has made a prima facie case that he is entitled to pension benefits, it is properly Defendants’ burden to clarify what entities are covered under the Plans in the first instance. The court remanded the claim to the district court to determine in the first instance whether Barton established a prima facie case and the court may consider the evidence available at trial, including Barton’s Social Security records, W-2 statements, pay stubs with the pension box marked, and a letter thanking him for ten years of service. The court also reversed the district court’s judgment for Defendants on Plaintiff’s statutory penalties claim. Although a plaintiff pursuing such claim must qualify as a plan participant, this issue turns on the ultimate merit of Barton’s claim for pension benefits. The court’s conclusion aptly sums up the importance of this case:

“This case ultimately is about burdens-to qualify for his pension, must a former employee who quit working for the company more than twenty-five years ago decipher the corporate structure of his former employer from documents that were not disclosed to him? Should he have saved all of his pay stubs in the off chance that his employer would demand proof that he met the hours requirement for obtaining a pension? Or should the corporate defendant bear this load? ERISA, our precedent, and common sense dictate that the corporate defendant should not lay that arduous task at the feet of former employees. To hold otherwise would essentially reward Lucy for pulling the football away from Charlie Brown, something that we do not believe Congress intended when it enacted ERISA.”

firm news, I will be presenting at the JCEB ERISA Litigation National Institute conference on May 19, 2016 on the topics of Discovery in ERISA Litigation – FRCP 26-34, ESI, and FOIA RequeIn sts and A Practical Guide to Ethics in ERISA Litigation. You can register for the conference here: Cassie Springer Ayeni will be presenting at ACI’s ERISA Litigation conference on June 27, 2016 at the Omni San Francisco on the topic of ERISA’s Remedial Scheme and 502(a)(3) Claims: CIGNA v. Amara and Latest Implications; Factoring Rochow Into the Equation; McCutchen and Montanile and Their Effect on Equitable Remedies; What Now Constitutes the “Plan” for Remedy Purposes, and More. You can register for the conference here:

Below is Kantor & Kantor LLP summary of this past week’s notable ERISA decisions.

Attorneys’ Fees

Second Circuit

· Following bench trial and order that Defendants breached their fiduciary duties under ERISA, awarding Plaintiffs’ attorneys’ fees in the amount of $2,230,237.83 and costs in the amount of $394,531.51, for a total of $ 2,624,768.34. Severstal Wheeling, Inc. Retirement Committee et al., v. WPN Corporation et al., No. 10CIV954LTSGWG, 2016 WL 1611501 (S.D.N.Y. Apr. 21, 2016) (Judge Laura Taylor Swain).

Disability Benefit Claims

Fourth Circuit

· Affirming district courts order granting judgment to Hartford Life & Accident Insurance Company in suit challenging Hartford’s denial of long-term disability benefits. Henderson v. Hartford Life & Acc. Ins. Co., No. 15-1344, __F.App’x__, 2016 WL 1581400 (4th Cir. Apr. 20, 2016) (Before WYNN and DIAZ, Circuit Judges, and DAVIS, Senior Circuit Judge).

Sixth Circuit

· Termination of long-term disability benefits to claimant with systemic lupus erythematosus (SLE) and fibromyalgia is not an abuse of discretion; state law claims dismissed as preempted by ERISA. Brookbank vs. Anthem Life Insurance Company, No. 1:15-CV-165, 2016 WL 1611380 (S.D. Ohio Apr. 20, 2016) (Judge Karen L. Litkovitz).

· Because claim for breach of contract under § 1132(a)(1)(B) provides adequate relief for Plaintiff’s only alleged injury, Hartford’s denial of his disability benefits, his claims for breach of fiduciary duty and disgorgement must fail as a matter of law. Davis v. Hartford Life & Accident Insurance Company, No. 3:14-CV-00507-TBR, 2016 WL 1574151 (W.D. Ky. Apr. 19, 2016) (Judge Thomas B. Russell).


Tenth Circuit

· Denying long-term disability claimant’s motion to compel Hartford to respond to two interrogatories pertaining to instances in which Hartford has obtained medical opinions through third-party University Disability Consortium (“UDC”) and used those medical opinions as the bases for denial or approval of claims for long-term disability benefits; granting parties’ motion for Level 1 Restriction of Exhibits including Hartford internal policy manuals and guidelines and an Independent Medical Consultant Services Agreement between Hartford and UDC. Rickaby v. Hartford Life and Accident Insurance Company, No. 15-CV-00813-WYD-NYW, 2016 WL 1597589 (D. Colo. Apr. 21, 2016) (Judge Nina Y. Wang).

ERISA Preemption

Third Circuit

· Granting Defendant’s motion to dismiss and finding preempted Plaintiff’s claims arising out of the purported failure by Guardian to pay Plaintiff’s disability benefits; further finding no “independent legal duties” created by New Jersey Consumer Fraud Act. Khan v. Guardian Life Ins. Co. of Am., No. CV 16-253, 2016 WL 1574611 (D.N.J. Apr. 19, 2016) (Judge John Michael Vazquez).

Ninth Circuit

· In suit by medical provider against insurer of ERISA health plan, the court denied insurer’s motion to dismiss breach of written contract, breach of oral contract, and breach of implied-in-fact contract claims, but granted motion as to quantum meruit claim because provider did not allege that any defendant ever requested the services rendered. Health v. Usable Mut. Ins. Co., No. C 15-05730 WHA, 2016 WL 1598729 (N.D. Cal. Apr. 21, 2016) (Judge William Alsup).

Life Insurance & AD&D Benefit Claims

Ninth Circuit

· Plaintiff’s amputation below the knee of his left leg following a severe car accident, but complicated by his diabetes, does not entitle him to benefits under accidental death and dismemberment policy, where the accident was not the “direct and sole cause” of the loss, and because an exclusion for “physical or mental illness” that “caused or contributed to” the loss applies to Plaintiff’s diabetes. Dowdy v. Metro. Life Ins. Co., No. 15-CV-03764-JST, 2016 WL 1570004 (N.D. Cal. Apr. 18, 2016) (Judge Jon S. Tigar).

Pension Benefit Claims

Ninth Circuit

· Reversing district court’s judgment concluding that Defendant did not abuse its discretion in denying Plaintiff’s claim for pension benefits and holding that where a participant has made a prima facie case that he is entitled to pension benefits, but lacks access to information needed to substantiate the claim and defendant controls such information, the burden shifts to the defendant to produce this information. Estate of Barton v. ADT Sec. Servs. Pension Plan, No. 13-56379, __F.3d__, 2016 WL 1612755 (9th Cir. Apr. 21, 2016) (Before: ALEX KOZINSKI, SANDRA S. IKUTA, and JOHN B. OWENS, Circuit Judges).

· In putative class action to recover withheld pension benefit contributions, denying Defendants’ motion to dismiss and finding Plaintiff has made a colorable claim that he is a Plan participant, sufficiently alleged a constitutional injury, and alleged facts sufficient to plausibly support an inference that he exhausted his administrative remedies. Norris v. Mazzola, No. 15-CV-04962-JSC, 2016 WL 1588345 (N.D. Cal. Apr. 20, 2016) (Magistrate Judge Jacqueline Scott Corley).

Pleading Issues & Procedure

Seventh Circuit

· Denying motion to remand ERISA lawsuit brought by home health care services provider against City of Hammond and claim’s management service company, finding that court has no discretion to remand a case presenting an issue of federal law and removal statute permits removal of a suit that includes both a federal law claim and an otherwise non-removable one. Anchor Health Sys., Inc. v. Radowski, No. 2:16-CV-65-RLM-PRC, 2016 WL 1593231 (N.D. Ind. Apr. 21, 2016) (Judge Robert L. Miller, Jr.)

Tenth Circuit

· In action brought by Savings Plan participant alleging breach of fiduciary duty and prohibited transaction claim, granting Motion to Restrict Public Access filed by Defendant Great-West Life & Annuity Insurance Company related to Plaintiff’s Motion for Class Certification and related filings. Teets v. Great-West Life & Annuity Insurance Company, No. 14-CV-02330-WJM-NYW, 2016 WL 1586418 (D. Colo. Apr. 20, 2016) (Magistrate Judge Nina Y. Wang).

Statute of Limitations

Tenth Circuit

· Affirming district court’s dismissal of employee benefit plans’ breach of fiduciary duty claim against Defendants for being time-barred, where plans had actual knowledge in August 2010 that employer contributions were not being made, statute of limitations ran in August 2013, and lawsuit was not filed until December 2014. Mid-S. Iron Workers Welfare Plan v. Harmon, No. 15-6064, 2016 WL 1445067 (10th Cir. Apr. 13, 2016) (Before GORSUCH, McKAY, and BACHARACH, Circuit Judges).

Subrogation/Reimbursement Claims

Second Circuit

· A party seeking a constructive trust on benefits allegedly incorrectly paid does not have to specifically identify, in an initial pleading, the location or account numbers of the funds the party seeks to recover; whether the monthly pension benefit payments received by Plaintiffs from Defendants have been dissipated is a matter upon which the defendants are entitled to discovery. Metzgar v. U.A. Plumbers & Steamfitters Local No. 22 Pension Fund, No. 13-CV-85V(F), 2016 WL 1545186 (W.D.N.Y. Apr. 15, 2016) (Judge Lawrence J. Vilardo).


Seventh Circuit

· Interest of justice requires granting Unum’s motion to transfer long-term disability case from W.D. Wisconsin to District of Massachusetts, where Plaintiff is a Massachusetts resident, obtained benefits under a plan located and administered in Massachusetts, and received medical treatment in Massachusetts. Leader v. Unum Life Insurance Company Of America, No. 16-CV-027-JDP, 2016 WL 1559187 (W.D. Wis. Apr. 18, 2016) (Judge James D. Peterson).

Withdrawal Liability & Unpaid Contributions

Seventh Circuit

· Finding that Equipment Leasing was a trade or business under common control with Sidney Truck such that it is jointly and severally liable for withdrawal liability, and granting summary judgment against all Defendants. Cent. States v. Sidney Truck & Storage, Inc., No. 14 C 3663, 2016 WL 1594967 (N.D. Ill. Apr. 21, 2016) (Judge John Robert Blakey).

· Granting Funds’ motion for summary judgment, finding that CBA obligated Wingra to make contributions to two of the Union’s member benefit funds, Plaintiffs Central States, Southeast and Southwest Areas Pension Fund and Central States, Southeast and Southwest Areas Health and Welfare Fund. Cent. States, Se. v. Wingra Redi-Mix, Inc., No. 12-CV-04084, 2016 WL 1555579 (N.D. Ill. Apr. 18, 2016) (Judge Andrea R. Wood).

* Please note that these are only case summaries of decisions as they are reported and do not constitute legal advice. These summaries are not updated to note any subsequent change in status, including whether a decision is reconsidered or vacated. The cases reported above were handled by other law firms but if you have questions about how the developing law impacts your ERISA benefit claim, the attorneys at Kantor & Kantor LLP may be able to advise you so please contact us. Case summaries authored by Michelle L. Roberts, Partner, Kantor & Kantor LLP, 1050 Marina Village Pkwy., Ste. 105, Alameda, CA 94501; Tel: 510-992-6130.

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