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ERISA Watch – Ninth Circuit Holds that DOT Definition of Sedentary Work Applies to ERISA Long-Term Disability Claim

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This week’s notable decision is a great one for disability claimants, at least those in the Ninth Circuit.  In Armani v. Nw. Mut. Life Ins. Co., No. 14-56866, __F.3d__, 2016 WL 6543523 (9th Cir. Nov. 4, 2016), the court held that the district court erred by refusing to apply the Dictionary of Occupational Titles (“DOT”) requirement for sedentary work to its de novo review of Armani’s long-term disability claim.  Northwestern Mutual determined that Armani could perform work at the “sedentary” level even though every physician and chiropractor who treated Armani determined that he could not sit for more than four hours a day.  Armani argued that he was unable to perform any occupation classified as sedentary, because, by definition, “sedentary” requires an ability to sit for six hours.  The district court rejected Armani’s proposed definition of “sedentary” work on the basis that it was drawn from the Social Security context, but the Ninth Circuit found that this was erroneous.  The court acknowledged that other courts evaluating ERISA claims and interpreting the DOT have consistently held that an employee who cannot sit for more than four hours in an eight-hour workday cannot perform work classified as “sedentary.”  Agreeing with this “commonsense conclusion,” the court held that an employee who cannot sit for more than four hours in an eight-hour workday cannot perform “sedentary” work that requires “sitting most of the time.”

After representing disability claimants for eleven years, I have seen a countless number of claims denied on the basis of finding sedentary work capacity even when the insurer’s own doctor acknowledges that the claimant cannot sit for six hours.  For this awesome decision about sitting, let’s give a standing ovation to the Fleishman Law Firm who represented Armani in that case.

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

Disability Benefit Claims

Ninth Circuit

  • Vacating the part of the judgment denying Plaintiff his long term disability benefits and remanding the case for further proceedings consistent with this opinion. “We agree with this commonsense conclusion and hold that an employee who cannot sit for more than four hours in an eight-hour workday cannot perform ‘sedentary’ work that requires ‘sitting most of the time.’” The court declined to decide whether the district court properly excluded extra-record evidence submitted by PlaintiffArmani v. Nw. Mut. Life Ins. Co., No. 14-56866, __F.3d__, 2016 WL 6543523 (9th Cir. Nov. 4, 2016) (Before: Dorothy W. Nelson and Richard A. Paez, Circuit Judges, and Elaine E. Bucklo,** Senior District Judge).

 

  • Following a reversal and remand to the plan administrator by the Ninth Circuit, the district court found that the Plan did not abuse its discretion in terminating Plaintiff’s disability pension benefits. On remand, the Plan’s support included six different board certified specialists, five of whom found that Plaintiff had never been “totally disabled” as defined by the Plan, and Plaintiff’s social media posts which suggested that Plaintiff had recovered from her depression sufficiently enough to workHoffman v. Screen Actors Guild-Producers Pension Plan, et al., No. 2:16-CV-01530-R-AJW, 2016 WL 6537531 (C.D. Cal. Nov. 2, 2016) (Judge Manuel L. Real).

ERISA Preemption

Fourth Circuit

  • The court found that state-law claims that seek damages for the post-termination denial of healthcare benefits are dismissed with prejudice because they are preempted by ERISA and cannot be reframed as a claim under the statute’s civil-enforcement provision. But, the wrongful-discharge claim, for which Plaintiff seeks restoration of his healthcare benefits, can proceed as an ERISA claimCroxson v. Seneca One Fin., Inc., No. PWG-16-449, 2016 WL 6462039 (D. Md. Nov. 1, 2016) (Judge Paul W. Grimm).

Eighth Circuit

Exhaustion of Administrative Remedies

Fifth Circuit

  • Although Plaintiff’s amended complaint does not specifically seek a remedy through ERISA, because the health insurance and retirement contribution plan benefits he seeks are ERISA-governed, Plaintiff must exhaust all the administrative remedies required by ERISA. This is even through Plaintiff was never afforded the opportunity to apply for benefits. The court dismissed without prejudice Plaintiff’s claims for these benefitsEngland v. Administrators of the Tulane Educ. Fund, No. CV 16-3184, 2016 WL 6520146 (E.D. La. Nov. 3, 2016) (Judge Carl Barbier).

Pension Benefit Claims

Sixth Circuit

  • In dispute over funds held in a 401(k) account, the court found that the divorce decree designated no “alternate payee” to receive “all or a portion of the benefits” such that it does not constitute a QDRO, and denied Executor’s motion for summary judgment. The Plan Administrator erred in relying on the divorce decree to determine the rightful beneficiary and should have distributed the funds to the beneficiary on the designation of beneficiary form, the deceased’s ex-wife.  The court declined to decide whether to impose a constructive trust on Betty for the benefit of the estate based on its argument that claiming the 401(k) fund is a violation of the divorce decree and breach of the agreementCunningham v. Hebert, No. 14 C 9292, 2016 WL 6442180 (N.D. Ill. Nov. 1, 2016) (Judge Joan H. Lefkow).

Pleading Issues & Procedure

Fourth Circuit

  • In putative class action alleging improper calculation of vesting and eligibility service under the terms of a pension plan, because Plaintiffs present a plausible argument supported by factual allegations that an exception to the exhaustion requirement should apply and it is not apparent that “all facts necessary to the affirmative defense [of exhaustion] clearly appear on the face of the complaint,” the court finds that it is premature to dismiss Plaintiffs’ wrongful denial of benefits claim based on Defendants’ failure to exhaust arguments. West v. Cont’l Auto., Inc., No. 316CV00502FDWDSC, 2016 WL 6543128 (W.D.N.C. Nov. 2, 2016) (Judge Frank D. Whitney).

Sixth Circuit

  • In putative class action alleging that Defendant Blue Cross Blue Shield of Michigan breached its fiduciary duty as a third-party administrator by charging Plaintiffs’ respective ERISA healthcare plans “hidden” fees, the court dismissed the Fourth Amended Complaint with prejudice because: (1) Plaintiffs lack constitutional standing to pursue “other appropriate equitable relief” under 29 U.S. C. § 1132(a)(3)(B) because they failed to allege that they suffered any particularized or concrete injury; and (2) Plaintiffs lack constitutional standing to pursue injunctive relief under 29 U.S. C. § 1132(a)(3)(A) because they failed to allege any likelihood of repeated injury or future harmCox v. Blue Cross Blue Shield of Michigan, No. 14-CV-13556, __F.Supp.3d__, 2016 WL 6395587 (E.D. Mich. Oct. 28, 2016) (Judge Mark A. Goldsmith).

Remedies

Second Circuit

  • Granting in part and denying in part Plaintiffs’ motion for prejudgment interest. Defendants must pay prejudgment interest to each plaintiff who has taken a distribution of benefits under the Plan, who received less than would have been due under the court’s new-hire remedy imposed on January 5, 2016.  Prejudgment interest shall be calculated using the prime interest rate, as published by the Federal Reserve, as to each plaintiff, calculated from the date of the plaintiff’s distribution up to January 5, 2016Frommert v. Becker, No. 00-CV-6311L, __F.Supp.3d__, 2016 WL 6524250 (W.D.N.Y. Nov. 3, 2016) (Judge David G. Larimer).

Venue

Seventh Circuit

  • In these putative class actions alleging that Wheaton Franciscan Services and others violated ERISA in administering Wheaton’s employee pension plan, the court denied Defendants’ motion to transfer both cases to the Eastern District of Missouri pursuant to 28 U.S.C. § 1404(a). The court found that a forum selection clause added to the plan on March 1, 2016 does not apply to Plaintiffs’ claimsCurtis v. Wheaton Franciscan Servs., Inc., No. 16 C 4232, 2016 WL 6432579 (N.D. Ill. Oct. 31, 2016) (Judge Gary Feinerman).

Eleventh Circuit

Withdrawal Liability & Unpaid Contributions

Sixth Circuit

 

  • “The Court will grant Plaintiffs’ motion for final judgment, and will enter judgment for Plaintiffs and against Defendants E&R Masonry Construction, Inc., Brick Masonry, Inc., BMC Masonry, Inc., Roberto Sanchez, Efrain Sanchez and Ulices Sanchez for $664,347.92, including $442,056.68 in fringe benefit contributions owed for the period of November 2012 through October 2015, $132,687.74 in liquidated damages and interest, and $89,603.50 in attorney fees and costs. Defendants will be held jointly and severally liable.” Bricklayers Pension Trust Fund – Metro. Area v. E&R Masonry Constr., Inc., No. 2:13-CV-14917, 2016 WL 6395966 (E.D. Mich. Oct. 28, 2016) (Judge Stephen J. Murphy, III).

Seventh Circuit

Eighth Circuit

 

Ninth Circuit

* 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.  If you have questions about how the developing law impacts your ERISA benefit claim, contact an experienced ERISA attorney.  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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