Call For A FREE Case Evaluation 510.992.6130

ERISA Watch – May 24, 2016

Posted By:

Good morning ERISA Watchers! This week’s buzzword is “remedies” or the lack thereof if you have relief available under ERISA Section 502(a)(1)(B). Two district court decisions out of the Sixth Circuit held that an aggrieved plaintiff cannot seek other “appropriate equitable relief” where he or she can pursue a claim for benefits for the same injury. Except for a few special jurisdictions, courts are dismissing claims for equitable relief when they are brought in connection with a denial of benefits claim. Is this the result intended by the U.S. Supreme Court’s decision in Varity? Tell us what you think! But first, enjoy a skim of this past week’s ERISA decisions.

Your reliable source for summaries of recent ERISA decisions

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

Select Slip Copy & Not Reported Decisions

Breach of Fiduciary Duty

Ninth Circuit

•· In matter alleging violation of Section 1106(b)(1), which prohibits self-dealing, or dealing with the assets of the fund in the fiduciary’s own interest, certifying for interlocutory appeal the fundamental question of whether Defendant TLIC can be considered a fiduciary at all under the law, since whether TLIC could be a fiduciary is fundamental to all other questions in the case, as no classes would be certified and no legal dispute over prohibited transactions would arise if there were no fiduciary duty owed by Defendants. Santomenno v. Transamerica Life Ins. Co., No. CV1202782DDPMANX, 2016 WL 2851289 (C.D. Cal. May 13, 2016) (Judge Dean D. Pregerson).

Disability Benefit Claims

First Circuit

•· Because Plaintiff cannot show that he was prejudiced by his lack of information about Aetna’s appeal process, Aetna is entitled to judgment on Plaintiff’s 29 U.S.C. § 1133(2) claim to the extent that claim is based upon an asserted violation of 29 C.F.R. § 2560.503-1(h)(2)(iii) (requiring provision of “claims procedures”). Further, Plaintiff identified no evidence that Aetna failed to take into account, and has identified no prejudice that resulted from Aetna’s alleged violation of 29 C.F.R. § 2560.503-1(h)(2)(iv) (requiring administrator to take into account all of the information submitted in support of a claim), such that there is no basis for a determination that Aetna failed to provide Plaintiff with a full and fair review of his appeal, as required by 29 U.S.C. § 1133(2). Gary Hopper v. Aetna Life Ins. Co., No. 14-CV-450-LM, 2016 WL 2888972 (D.N.H. May 16, 2016) (Judge Landya McCafferty).

Second Circuit

•· “Thus, in light of Dr. Gibson’s notes identifying plaintiff as disabled, the lack of peer-to-peer review, and the reliance on an ambiguous third-party report of Dr. Gibson’s opinion, the Court finds that Aetna’s conclusion that plaintiff had the ability to work on a full-time basis with accommodation is not based on evidence a reasonable mind might accept as adequate. The Court does not suggest that Aetna should have made a different decision but will remand the matter to enable Aetna to complete its determination with a competent evaluation of plaintiff’s capacity by her treating physicians.” Mirto v. Aetna Life Insurance Company, Yale New Haven Health System Long Term Disability Plan, No. 3:14CV1640 (WWE), 2016 WL 2851542 (D. Conn. May 13, 2016) (Judge Warren W. Eginton).

ERISA Preemption

Fifth Circuit

•· ERISA preempts Plaintiff’s state-law tort claims related to Blue Cross and Blue Shield of Texas’s denial of prescription medication, Remicade, which allegedly resulted in Plaintiff’s spouse’s death from diabetic ketoacidosis. The preemption issue is dispositive and requires dismissal of Plaintiff’s claims with prejudice because Plaintiff did not request leave to amend to attempt to assert a non-preempted claim. Milton v. Blue Cross Blue Shield Of Texas, Inc., No. CV 16-458, 2016 WL 2926846 (E.D. La. May 19, 2016) (Judge Lance M. Africk).

Ninth Circuit

•· GHC has demonstrated that complete preemption of Plaintiffs’ state-law Washington’s Consumer Protection Act claims, as they apply to GHC’s administration of ERISA plans, is warranted because both prongs of the Davila test are met. Hansen v. Grp. Health Coop., No. C15-1436RAJ, 2016 WL 2930442 (W.D. Wash. May 19, 2016) (Judge Richard A. Jones).

Pleading Issues & Procedure

Second Circuit

•· Because Plaintiff’s proposed ERISA breach of fiduciary duty claim is based on information that Plaintiff knew, or should have known, in advance of the scheduling order’s deadline to amend the complaint, Plaintiff has failed to show “good cause” under Rule 16(b). Motorola Sols., Inc. v. Xerox Bus. Servs., LLC, No. 14CIV206LTSHBP, 2016 WL 2889057 (S.D.N.Y. May 17, 2016) (Magistrate Judge Henry Pitman).

Ninth Circuit

•· In matter involving a single claim for relief related to the calculation of retirement benefits, Plaintiff’s motion for an enlargement of time is denied where Plaintiff failed to carry his burden under Rule 16(b)(4) and LR 16-3(a) to show that the court should modify the court’s prior scheduling order. Plaintiff delayed too long seeking to amend his complaint and that delay, combined with the passage of the discovery close date and the summary judgment deadline, results in significant prejudice to the Defendant such that Plaintiff is denied leave to amend complaint. Wortman v. The Boeing Company, No. 3:15-CV-1735-AC, 2016 WL 2869060 (D. Or. May 16, 2016) (Judge John V. Acosta).

Provider Claims

Second Circuit

•· Plaintiffs do not have ERISA standing to pursue claims governed by Plans with anti-assignment provisions, where the anti-assignment provisions in the governing Plans unambiguously prohibit assignment. Plaintiffs do not allege any extraordinary circumstances that warrant the application of estoppel and the parties have already litigated whether direct payments to the plaintiffs waived the anti-assignment provisions (and the court held that the argument had no merit). The anti-assignment provisions also preclude Plaintiffs’ pursuit of the ERISA claims as their patients’ “authorized representatives” under 29 C.F.R. § 2560.503-1(b)(4). Mbody Minimally Invasive Surgery, P.C. v. Empire Healthchoice Hmo, Inc., No. 13CV6551 (DLC), 2016 WL 2939164 (S.D.N.Y. May 19, 2016) (Judge Denise Cote).

Ninth Circuit

•· In a matter brought by a hospital against administrators of self-insured medical plan for additional payment for medical services the hospital provided to medical plan participants, granting Defendant’s motion to provide a more definite statement of its claims in accordance with Rule 12(e), where Plaintiff did not allege basic facts concerning the claimed representations and how they support the assertion of either breach of an oral or implied-in-fact contract. Lodi Mem’l Hosp. Ass’n v. Tiger Lines, LLC, No. 215CV00319MCEKJN, 2016 WL 2855187 (E.D. Cal. May 16, 2016) (Judge Morrison C. England, Jr.).

•· In matter brought by surgery centers against hundreds of defendants for stopping payment for lap-band surgeries, dismissing the action with prejudice under Rule 41(b) for Plaintiff’s failure to retain new lawyers, where previous lawyers withdrew for non-payment of attorneys’ fees. Rule 41(b) provides that involuntary dismissals are on the merits, absent exceptions not applicable here. Almont Ambulatory Surgery Ctr., LLC v. UnitedHealth Grp., Inc., No. CV1402139MWFVBKX, 2016 WL 2851298 (C.D. Cal. May 13, 2016) (Judge Michael W. Fitzgerald).

Remedies

Sixth Circuit

•· In complaint for long-term disability benefits, under “Claims,” Plaintiff asserts that “29 U.S.C. §§ 1132(a)(1)(B) and (a)(3) are the enforcement mechanisms permitting [him] to enforce the contractual terms of the insurance policies, to obtain past benefits, to obtain reinstatement of future disability benefits, to obtain declaratory relief, and to obtain other appropriate equitable relief including, but not limited to, surcharge.” Because Plaintiff failed to alleged an injury separate and distinct from the denial of benefits or show why the remedy afforded by Congress under § 1132(a)(1)(B) is inadequate, the court dismissed his § 1132(a)(3) claim. Quarles v. Hartford Life & Accident Insurance Company, No. 3:15-CV-372-DJH, 2016 WL 2903284 (W.D. Ky. May 18, 2016) (Judge David J. Hale).

•· Where Plaintiff could have brought suit under § 502(a)(1)(B), he is precluded from proceeding under § 502(a)(3). Further, Plaintiff’s requested relief under § 502(a)(3) is not “appropriate equitable relief,” where Plaintiff seeks to recover the funds that Central States promised to pay his medical providers in settling the subrogation lien on his tort judgment, where Central States fulfilled its promised (albeit in an untimely fashion), and any sums awarded to Plaintiff for the stress he suffered and the negative impact on his credit profile would be compensatory, and therefore legal, in nature. Harrison v. Teamcare-A Cent. States Health Plan, et al., No. CV 15-60-DLB-CJS, 2016 WL 2858520 (E.D. Ky. May 13, 2016) (Judge David L. Bunning).

Retaliation Claims

Eighth Circuit

•· Assuming without deciding, that Section 510 of ERISA provides a claim for retaliation based on Plaintiff’s informal complaints and protests, Defendants articulated legitimate nondiscriminatory reasons for Plaintiff’s termination, including that Plaintiff sent numerous emails from her work account disparaging her bosses at the company, failed to cooperate fully in providing her boss with customer information, and acting disrespectfully to them in front of customers. Graham v. Hubbs Mach. & Mfg., Inc., No. 4:14-CV-419 (CEJ), 2016 WL 2910209 (E.D. Mo. May 19, 2016) (Judge Carol E. Jackson).

Statute of Limitations

Tenth Circuit

•· Granting Defendants’ Motion for Partial Dismissal Under Rule 12(b)(6) because claims are time barred by the one-year contractual limitations period, and concluding that (1) an average plan participant would not consider the SPD’s limitations provision to be ambiguous; (2) 29 C.F.R. § 2560.503-1(g)(1)(iv) only requires initial denial letters to include time limits applicable to a plan administrator’s internal review procedures; (3) 29 C.F.R. § 2560.503-1(j)(4) does not require the plan administrator to include any time limits for review procedures in the final denial letters. Michael C.D. & Michael D. v. United Healthcare, United Behavioral Health, Georgia-Pacific Llc, & The Georgia-Pacific Lifechoices Benefits Program (501), No. 2:15-CV-306-DAK, 2016 WL 2888984 (D. Utah May 17, 2016) (Judge Dale A. Kimball).

Withdrawal Liability & Unpaid Contributions

Second Circuit

•· Confirming Arbitration Award granting Petitioners $7,940.30 plus an additional $835 in attorneys’ fees and costs incurred in connection with the instant action for a total award of $8,775.30. Trustees of Empire State Carpenters Annuity v. Baroco Contraction Corp., No. 15CV5690DRHSIL, 2016 WL 2889007 (E.D.N.Y. May 17, 2016) (Judge Denis R. Hurley).

Fourth Circuit

•· Granting Plaintiff’s motion for summary judgment seeking to recover on a fringe benefit bond on which Defendant, Western Surety Company, is the surety. Sheet Metal Workers’ Local Union No. 100 Washington v. W. Sur. Co., No. GJH-15-1175, 2016 WL 2903553 (D. Md. May 17, 2016) (Judge George J. Hazel).

Sixth Circuit

•· Recommending grant of motion for default judgment filed by plaintiff Boards of Trustees of Ohio Laborers’ Fringe Benefit Programs against defendant Waugh Excavating, LLC. Boards of Trustees of Ohio Laborers’ Fringe Benefit Programs v. Waugh Excavating, LLC, No. 2:16-CV-213, 2016 WL 2892483 (S.D. Ohio May 18, 2016) (Magistrate Judge Terence P. Kemp).

Eighth Circuit

•· Concluding that Stika Concrete and General Contracting is the alter ego of Stika Concrete Contracting Co., Inc.; that the corporate veil should be pierced to enable Plaintiffs to collect the balance of the default judgment against Stika Concrete Contracting Co., Inc. (Original Stika) from Stika Concrete and General Contracting (New Stika); and that Plaintiffs are entitled to a creditor’s bill in equity to satisfy the judgment against Stika Concrete Contracting Co., Inc. Cement Masons Local 527, et al. v. Stika Concrete Contracting Co., Inc., No. 4:14-CV-1030-JAR, 2016 WL 2894716 (E.D. Mo. May 18, 2016) (Judge John A. Ross).

* 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.

LATEST FROM OUR BLOG

Get The Help You Need Today