Call For A FREE Case Evaluation 510.992.6130

Your ERISA Watch – Court Finds Collateral Estoppel Applies to Wit v. UBH Decision on Issue of Conflict of Interest in Residential Treatment Dispute

Posted By:

This week’s notable decision is Bain v. United Healthcare Inc., No. 15-CV-03305-EMC (N.D. Cal. Feb. 15, 2020), a case involving a dispute over residential treatment benefits.  What’s notable about this decision, and a couple of other decisions picked up this past week, is the reverberation of the groundbreaking decision in Wit v. United Behavioral Health, No. 14-CV-02346-JCS, 2019 WL 1033730 (N.D. Cal. Mar. 5, 2019).

The decision is heavily redacted to protect the confidential medical information of a then-minor but here is the gist:  The Bains sought residential treatment benefits for their daughter, Alaina, under the Sagent Advisors, Inc. Group Health Plan administered by Oxford Health Insurance and its affiliate, United Behavioral Health (collectively, “UBH”).  UBH denied the treatment based on lack of medical necessity, and the Bains exhausted all available internal appeals.  They also submitted an external appeal as permitted by the Plan and New York Law to the New York State Department of Financial Services, who assign the appeal to IMEDECS (Independent Medical Expert Consulting Services, Inc.).  UBH provided IMEDECS a copy of its Level of Care (“LOC”) Guidelines, among other documents supporting its decision.  IMEDECS ultimately upheld the denial of benefits.  Thereafter, the Bains unsuccessfully sought UBH’s reconsideration and then filed suit.  In the present decision, the court considered cross-motions for judgment pursuant to FRCP 52 on the Bains’ claim for benefits under ERISA Section 502(a)(1)(B).

First, the court rejected the Bains’ argument that collateral estoppel should be applied to prevent UBH from contesting liability based on the Wit decision, where the court found that the LOC Guidelines were not, in many instances, consistent with standards of care generally accepted in the mental health field.  The court reasoned that “the record is not clear as to any specific causative connection in the decision to deny benefits here.”

However, the court did agree with the Bains that collateral estoppel applies to the “significant skepticism” that should be afforded to UBH’s benefit decision due to its conflict of interest.  The court explained that the lack of a final judgment in Wit does not preclude the application of collateral estoppel.  Second, even if its not clear how UBH applied the LOC Guidelines in this case, the determination in Wit is “a basis to apply a healthy amount of skepticism to the standard of review.”

On the merits of the claim, the court’s opinion is mostly redacted, but it did make a couple of significant public findings.  First, it found that the external review is relevant, but it gets no deference from the court and it does not insulate UBH’s claim decisions.  IMEDECS was provided with a copy of the LOC Guidelines but it does not appear that it was presented with evidence regarding UBH’s conflict of interest with respect to those guidelines.  Second, the court found that the logic of the case law holding that insurers should do Independent Medical Evaluations before denying long-term disability claims based on psychiatric disabilities is applicable to psychiatric health claims as well.  See e.g., Salomaa v. Honda Long Term Disability Plan, 642 F.3d 666, 676 (9th Cir. 2011).

The court concluded that Defendants abused their discretion by denying the Bains’ benefits.  As a remedy, the court remanded the claim to UBH because it cannot determine whether the Bains are entitled to benefits based on valid guidelines or other criteria.  The court granted in part and denied in part the Bains’ motion and denied UBH’s motion.

Below is a summary of this past week’s notable ERISA decisions by subject matter and jurisdiction.

Breach of Fiduciary Duty

Third Circuit

Minerly v. Aetna, Inc., No. 19-2730, __F.App’x__, 2020 WL 734448 (3d Cir. Feb. 13, 2020) (Before Chagares, Restrepo, and Bibas, Circuit Judges). The court of appeals affirmed the district court’s summary judgment in favor of Defendants on Plaintiff’s breach of fiduciary duty claim. Plaintiff’s first argument was that Aetna breached a fiduciary duty by misrepresenting information. He argued that he requested a copy of his policy, that his employer failed to give it to him, and that Aetna should be held liable as his employer’s agent. The court held that there is no evidence in the record to support this assertion. Plaintiff also argued that Aetna breached a duty of loyalty owed to him by seeking reimbursement contrary to his interest as a beneficiary of and participant in his employer’s employee benefit plan. The court held that Plaintiff’s position amounted to an assertion that Defendants violated ERISA by enforcing the plain terms of the reimbursement requirement in the Aetna PA HMO Policy.  However, Aetna’s enforcement reflects ERISA’s principal function: to protect contractually defined benefits. Lastly, Plaintiff argued that Aetna breached a duty because the terms of the insurance policies that the employer offered to employees varied depending on employees’ states of residence. Plaintiff relied on the reasoning in the Supreme Court case, Conkright v. Frommert ‘that it would be problematic under ERISA if employees could be entitled to different benefits depending on where they live.’ The court of appeals found that this language from the Conkright case is inapposite. The Conkright decision has to do with avoiding conflicting decisions in federal courts, not conflicting judicial interpretations of a single ERISA plan, as would be the case here.

Disability Benefit Claims

Fifth Circuit

Bayer v. Unum Life Insurance Company of America, et al., No. CV 18-9702, 2020 WL 616128 (E.D. La. Feb. 10, 2020) (Judge Eldon E. Fallon). Unum denied Plaintiff’s claims for short- and long-term disability benefits.  Unum argued her multiple sclerosis was a pre-existing condition, and as such, constituted an exclusion to coverage. Defendant filed a motion to strike all evidence that it deemed to be outside the AR, including an affidavit from Plaintiff’s doctor stating that she did not receive treatment for MS during the relevant time period, explaining “peripheral neuropathy,” and why Defendant’s understanding of it was faulty and contrary to basic medical science. The court granted Defendant’s motion in part, explaining that once the AR is determined, it could not stray from it except for certain limited circumstances. The court was not persuaded that the affidavit in question was introduced solely to assist the court in understanding the medical terminology or practice related to the claim, but rather constituted evidence offered to allow the district court to resolve a disputed issue of material fact regarding the claim. Accordingly, the court struck the letter from the record except for paragraphs explaining and clarifying medical terminology.

Eleventh Circuit

Washburn v. AT&T Umbrella Benefit Plan #1, No. 4:18-CV-00647-CLM, 2020 WL 705077 (N.D. Ala. Feb. 12, 2020) (Judge Corey L. Maze). Plaintiff worked for Bellsouth Telecommunications and thus was a participant in AT&T’s short-term disability and long-term disability benefit plans.  He suffered a stroke and submitted a claim for short-term disability benefits, which was approved. Before Plaintiff’s 52-week short-term disability benefit period ended, however, Bellsouth closed his work site and he was terminated. Plaintiff’s short-term disability benefits were also terminated on the same date. Furthermore, even though Plaintiff had been approved in advance for long-term disability benefits, his claim for long-term disability benefits was denied because he had not completed the full term of short-term disability benefits. Plaintiff appealed, but was told he was no longer an eligible employee, as required for payment of benefits under the short-term disability and long-term disability plans. He filed suit. On cross-motions for judgment, the court apologized for the “unfortunate outcome,” but ruled in favor of Defendants and against Plaintiff on all claims. The court relied on the short-term disability SPD, which stated that benefits ended when “[y]our employment is terminated for any reason (including your death, retirement or layoff).” The court further found that Plaintiff had waived the long-term disability issue by not briefing it, but even if he had, he would not be eligible for long-term disability benefits because the long-term disability plan documents required a participant to exhaust 52 weeks of short-term disability benefits before becoming eligible for long-term disability benefits. Plaintiff fell short by three weeks and thus was not eligible. The court further found that Plaintiff was ineligible for continued life insurance benefits for the same reasons and issued judgment in Defendants’ favor.

ERISA Preemption

Second Circuit

Gonzalez De Fuente, et al. v. Preferred Home Care of New York, et. al., 18-CV-06749, 2020 WL 728391 (E.D.N.Y. Feb. 13, 2020) (Judge Ann M. Donnelly). Employees brought claims under ERISA against their employer and HealthCap. The employer-funded a trust to pay for an employee health benefit plan. HealthCap entered into a “quota share reinsurance agreement” with the employer, whereby HealthCap assumed a share of the trust’s obligations and returned investment profits and excess premiums to the employer. Plaintiffs allege the arrangement between the employer and HealthCap is a prohibited transaction in violation ERISA and New York’s Wage Parity Law. HealthCap filed a motion to dismiss the claims against it. Under New York insurance law, an insurer not licensed in New York must post a bond before filing any pleadings. HealthCap argued first that the statute did not apply because Plaintiffs’ claims were not “arising under” an insurance contract, and second even if the statute did apply it was preempted by ERISA which does not require a bond. The Court was not persuaded by either argument. It determined that Plaintiffs’ claims were aimed at the contract between HealthCap and the employer, and therefore arose under an insurance contract. The Court also determined that the state statute was a traditional state regulation that was generally applied and therefore not preempted. The Court concluded that HealthCap was required to post a bond before filing any pleadings and set that bond at $25 million.

Fifth Circuit

St. Charles Surgical Hosp., LLC v. La. Health Serv. & Indem. Co., 19-13497, 2020 WL 634918 (E.D. La. Feb. 11, 2020) (Judge Susie Morgan). The Court granted in part and denied in part the Center for Restorative Breast Surgery, L.L.C. (“Center”) and the St. Charles Surgical Hospital’s (“Hospital”) Motion to Remand and for Just Costs and Actual Expenses. Here, there is a long history dating back to 2010 between the Center, Hospital, and BCBS Louisiana over claims reimbursement. Three actions—two in federal court and one in state court—ultimately leading to the dismissal of the Center and Hospital’s ERISA action against BCBS Louisiana and a requirement that the Center and Hospital’s state law claims in state court be limited only to Louisiana fraud/abuse of rights claims.  Three amended state court complaints and two years later, BCBS Louisiana removed the state court matter to federal court arguing that the state law claims were preempted by ERISA. Following a lengthy analysis, the Court held that the Center and Hospital’s state law claims (1) are not attempting to enforce rights under ERISA, (2) give rise to an independent legal duty under state law, (3) do not address an area of exclusive federal concern, (4) do not directly affect the relationship among traditional ERISA entities, and (5) are not preempted by ERISA.  The Court remanded the matter to state court but denied attorneys’ fees and costs.

Ninth Circuit

Kimmel Carter Roman Peltz & O’Neill, P.A. v. Costco Wholesale Corp., No. C19-741 TSZ, 2020 WL 639646 (W.D. Wash. Feb. 11, 2020) (Judge Thomas S. Zilly).  In this action challenging a self-funded medical benefit plan’s provisions against “common fund” attorney’s fee recovery and its requirement in subrogation cases that attorneys sign the plan’s reimbursement agreement, the court granted Defendants’ motion to dismiss Plaintiffs’ claims, holding that the claims were preempted by ERISA and that there was no basis for a claim that the attorney-signature requirement violated state ethics rules. The court explained: “Plaintiffs’ requested relief that the reimbursement terms in Costco’s ERISA plan be declared ‘unlawful, unenforceable, void against public policy, and of no effect’ directly ‘relates to’ an ERISA plan. Plaintiffs’ claims seek to mandate payments by the plan to Ms. Gerlach and Kimmel Carter in direct abrogation of the Plan terms. Any state law claim that seeks to specify when an ERISA Plan must pay benefits is preempted. Indeed, other courts uniformly hold that state and common law claims involving similar plan reimbursement terms are preempted by ERISA.”

Eleventh Circuit

Surgery Center of Viera, LLC v. Cigna Health and Life Inc. Co., No. 6:19-cv-2110-Orl-22DCI, 2020 WL 686026 (M.D. Fla. Feb. 11, 2020) (Judge Anne C. Conway). Surgery Center filed a four-count complaint. The first count asserted an ERISA claim seeking a penalty for failure to produce the administrative record. The remaining three were state law claims for breach of contract, unjust enrichment, and quantum meruit – all related to a claimed underpayment for services rendered by Surgery Center to an ERISA medical plan participant. Defendants moved to dismiss the state law claims on the grounds of ERISA preemption. Citing to Eleventh Circuit authority, the court noted a distinction between two types of claims, those challenging the “rate of payment” pursuant to a provider-insurer agreement, and those challenging the “right to payment” under the terms of an ERISA beneficiary’s plan. Surgery Center’s claims were more akin to a rate of payment dispute because it had not alleged a failure to pay by Defendants, but rather that Defendants had underpaid for services rendered. Because the state law claims were “rate of payment” claims, they were not preempted by ERISA.

Exhaustion of Administrative Remedies

Third Circuit

Minerly v. Aetna, Inc., No. 19-2730, __F.App’x__, 2020 WL 734448 (3d Cir. Feb. 13, 2020) (Before Chagares, Restrepo, and Bibas, Circuit Judges). The court affirmed the district court’s summary judgment in favor of Defendants on Plaintiff’s benefits claim under Section 502(a)(1)(B) for failure to exhaust pre-litigation administrative remedies.  Plaintiff was injured in a motorcycle accident and Aetna paid $3,512.82 for emergency medical services and Aetna demanded repayment if he recovered from his tortfeasor. Plaintiff filed a personal injury lawsuit against his tortfeasor recovered money which he then paid to Aetna but he never appealed or contested Aetna’s demand for repayment administratively. Instead, Plaintiff filed a class action in state court against Aetna claiming that Aetna had violated a New Jersey regulation forbidding insurers from seeking subrogation and reimbursement. Defendants removed the matter to federal court, and the court granted Aetna’s motion for summary judgment that Plaintiff failed to exhaust his pre-litigation administrative remedies. Before the court of appeals, Plaintiff argued that he was not required to exhaust his administrative remedies since the Aetna PA HMO Policy was not an ERISA plan document that governed his benefits. The court held otherwise: multiple documents may “collectively form” an employee benefit plan, and those documents need not “be formally labelled” as comprising the plan. Plaintiff also argued that the Aetna PA HMO Policy was not a plan document because it is an insurance policy. The court held that an insurance policy may constitute the ‘written instrument’ of an ERISA plan. Also before the court of appeals, Plaintiff argued that he was not required to exhaust his pre-litigation administrative appeals because he never received a copy of the Aetna PA HMO Policy. The court found that Aetna was not the plan administrator responsible for disclosing the policy.

Medical Benefit Claims

Second Circuit

Gonzalez de Fuente, et al. v. Preferred Home Care of New York, LLC, et al., No. 18-cv-06749 (AMD) (PK), 2020 WL 738150, (E.D.N.Y. Feb. 13, 2020) (Judge Ann M. Donnelly) This is a case involving allegations that Defendants “captive insurance scheme” violates ERISA and does not provide them with the benefit portion under New York Wage Parity Law. Defendants brought a motion to stay the case pending the decision in Thole v. U.S. Bank, 873 F.3d 617 (8th Cir. 2017), 139 S. Ct. 2771 (2019) (Mem.) (where the Supreme Court will decide whether participants of an overfunded benefit plan have constitutional standing). The court granted the stay disagreeing with plaintiffs’ arguments that the decision in Thole will not determine the standing issue in this case. The court explained it would be deciding an issue of law the Supreme court will answer definitely in a few months and would be an inefficient use of the court’s time and it could possibly render a decision inconsistent with the Supreme Court.

Ninth Circuit

Bain v. United Healthcare Inc., No. 15-CV-03305-EMC (N.D. Cal. Feb. 15, 2020) (Judge Edward M. Chen). See Notable Decision summary above.

Eleventh Circuit

Chiron Recovery Ctr., et al. v. United Healthcare Servs., et al., 19-CV-80766, 2020 WL 607111 (S.D. Fla. Feb. 7, 2020) (Judge Robin L. Rosenberg). The court granted United’s motion to dismiss a second lawsuit filed by Chiron Recovery against United in regard to United’s application of certain improper offsets to recoup overpaid benefits to Chiron patients. In the instant lawsuit, United moved to dismiss Chiron Recovery’s attempt under ERISA § 1132(c) to obtain relevant health plan documents to determine if the overpayments were in violation of certain applicable insurance plans. The court dismissed Chiron’s case with prejudice on four grounds: (1) the amended complaint improperly added a new party in violation of the court’s prior order to dismiss; (2) the complaint improperly added a new claim in violation of the court’s prior order; (3) the complaint failed to properly allege Section 1132(c) claims against the actual plan administrators (United was not the plan administrator for these plans); and (4) Chiron’s failure to obtain valid assignments could not be remedied with a power of attorney to establish the standing of the individual patient-plaintiffs.

Pension Benefit Claims

Second Circuit

Wegmann v. Young Adult Institute, Inc., No. 15 CIV. 3815 (KPF), 2020 WL 758109 (S.D.N.Y. Feb. 14, 2020) (Judge Eric C. Tostrud).  In a bench trial held last year, the court determined that Plaintiff was entitled to relief on her ERISA claim for additional SERP benefits. The court held a damages hearing and concluded that Plaintiff is entitled to a net annual annuity of $274,339.09, to be paid in monthly installments commencing on January 25, 2022.  “The Court recognizes that this is a considerable supplemental benefit, particularly given the charitable organization for which Plaintiff worked, and yet it is the agreement these parties made.”

Fourth Circuit

Lyon Shipyard 401(k) Plan v. Subeh, et al., No. 2:18-CV-124, 2020 WL 618825 (E.D. Va. Feb. 10, 2020) (Judge Henry Coke Morgan, Jr.). The Lyon Shipyard 401(k) Plan filed a complaint for interpleader relief. Defendant Subeh alleged that Defendant Jones’s marriage to decedent was void due to decedent’s mental incapacity. After numerous proceedings, Subeh and Jones filed motions for summary judgment. The court denied Subeh’s motion because under Virginia law, a marriage to which a party is not capable of consenting was not void, but voidable. Subeh did not produce any evidence showing that there had been an annulment or divorce. Therefore, the marriage between decedent and Jones was valid. Furthermore, the validity of the marriage could not be collaterally attacked following the death of a party. Jones argued that her marriage was valid and that she was entitled to the ERISA Plan funds. The court granted Jones’s motion, holding that she was entitled to the Plan funds as the surviving spouse.

Seventh Circuit

Smith v. Rockwell Automation, Inc. et al., No. 19-C-0505, 2020 WL 620221 (E.D. Wis. Feb. 10, 2020) (Judge Lynn Adelman). Defendants moved to dismiss this action alleging Defendants violated ERISA by calculating the actuarial equivalence for annuities using the outdated 1971 GAM mortality table. Defendants advanced several theories for why the use of outdated mortality tables does not violate ERISA including an argument the actuarial assumptions used were reasonable at the time they were written into the plan. The court engaged in a thorough analysis of each of Defendants’ position and concluded Defendants’ theories do not hold water. The Court denied the motion to dismiss in its entirety concluding Plaintiffs have adequately alleged the plan’s actuarial assumptions do not provide actuarial equivalence.

Pleading Issues & Procedure

Tenth Circuit

David P. v. United Healthcare Ins. Co., No. 219CV00225JNPPMW, 2020 WL 607620 (D. Utah Feb. 7, 2020) (Judge Jill N. Parrish). Defendants moved to dismiss the Complaint which alleges ERISA claims arising out of mental health treatment of a minor. The court denied the motion as to standing. The court found that David P. had both statutory and constitutional standing to sue under ERISA because he was a plan participant and incurred medical expenses for his daughter L.P.’s treatment. Defendants argued that the Complaint should also be dismissed or alternatively stayed because of the potential preclusive effects of the pending class action Wit v. United Behavioral Health, 317 F.R.D. 106 (N.D. Cal. 2016). The court found that Wit has entered findings of fact and conclusions of law but has not entered final judgment on the merits. Defendants concede Wit’s preclusive effects cannot be predetermined at this point. The court found that the Wit class action has no formal preclusive effects on Plaintiffs’ claims and declined to dismiss on these grounds. The court also considered the first to file rule and found that deference to the first-filed class action is not warranted because the defendants do not substantially overlap as the administrators are separate entities (i.e. UBH and United Healthcare Insurance Company) and the claims and issues do not substantially overlap because Plaintiffs also seek parity violations and statutory penalties. Although Plaintiffs contend they are not members of the Wit class, the court found they do have substantial overlap because of the application of the UBH Guidelines in the denials. The court also found that that Plaintiffs plausibly alleged all three elements of their Parity Act claims. The court dismissed Plaintiffs’ claim for statutory penalties because the requests were made to United, not MSCHRO, the plan administrator.

Johnathan Z. v. Oxford Health Plans, No. 2:18-CV-383-JNP-PMW, 2020 WL 607896 (D. Utah Feb. 7, 2020) (Judge Jill N. Parrish). [Editor’s Note: This decision involves the same counsel and judge as the immediately preceding summary David P. and much of the court’s decision is verbatim to the David P. decision.] The court denied Defendant’s motion to dismiss the Complaint which alleges ERISA claims arising out of mental health treatment. As to Defendant’s standing challenge, the court found that Johnathan Z. had both statutory and constitutional standing to sue under ERISA because he was a plan participant and incurred medical expenses for his son Daniel Z.’s treatment. Defendant argued that the Complaint should also be dismissed or alternatively stayed because of the potential preclusive effects of the pending class action Wit v. United Behavioral Health, 317 F.R.D. 106 (N.D. Cal. 2016). The court found that Wit has entered findings of fact and conclusions of law but has not entered final judgment on the merits. Defendant concedes Wit’s preclusive effects cannot be predetermined at this point. The court found that the Wit class action has no formal preclusive effects on Plaintiffs’ claims and declined to dismiss on these grounds. The court also considered the first to file rule and found that deference to the first-filed class action is not warranted because the defendants do not substantially overlap as the administrators are separate entities (i.e. UBH and Oxford) and the claims and issues do not substantially overlap because Plaintiffs also seek parity violations. The court also found that that Plaintiffs plausibly alleged all three elements of their Parity Act claims.

Provider Claims

Ninth Circuit

County of Monterey v. Blue Cross of California, No. 17-CV-04260-LHK, 2020 WL 709308 (N.D. Cal. Feb. 12, 2020) (Judge Lucy H. Koh). County of Monterey owns and operates the hospital Natividad. Natividad entered a Facility Agreement with Blue Cross of California (“Anthem”) which governed how Anthem would reimburse Natividad for healthcare services. When the Agreement was made, Natividad was not yet certified for trauma services. Instead, an interim provision was included as follows: “parties acknowledge that currently Facility [i.e., Natividad] is not certified to provide trauma services and that all such services are currently reimbursable under the emergency services rate.” Natividad became certified and began treating trauma patients. Anthem and Natividad unsuccessfully attempted to negotiate a reimbursement rate for trauma services. Anthem applied the Facility Agreement’s emergency services reimbursement to Natividad’s trauma claim, causing a large difference between Natividad’s billed charges and what Anthem reimbursed. Natividad initiated this litigation to recover benefits for trauma services due under 29 U.S.C. § 1132(a)(1)(B). It alleges that Anthem’s decision to apply the emergency services reimbursement rate conflicted with the language of the Facility Agreement. First, the parties participated in arbitration relating to the claims of Anthem’s fully insured members. The Final Arbitration Award determined the parties did not agree to a rate for trauma services and applied a “reasonable rate” of 80%.  The litigation continued after the arbitration for patient claims that were not insured by Anthem. The Court determined that the Final Arbitration Award did not resolve whether Anthem had abused its discretion by applying the emergency services rate, and therefore Anthem was not collaterally estopped in the litigation by the findings of the arbitration. The Court reasoned that the parties had contemplated Natividad getting certified to provide trauma services and beginning to provide those services before an agreement on the reimbursement rate could be reached. Per the Agreement, in that situation Anthem should apply the emergency services reimbursement rate. Therefore, the Court concluded that based on the language of the Agreement, Anthem did not abuse its discretion in using the emergency services rate.

Statutory Penalties

Eleventh Circuit

Surgery Center of Viera, LLC v. Cigna Health and Life Inc. Co., No. 6:19-cv-2110-Orl-22DCI, 2020 WL 686026 (M.D. Fla. Feb. 11, 2020) (Judge Anne C. Conway). Surgery Center filed a four-count complaint. The first count asserted an ERISA claim seeking penalties for failure to produce the administrative record. The remining three were state law claims. Defendants moved to dismiss the first count. Surgery Center alleged it sent Cigna, the claims administrator, multiple letters requesting the administrative record for a patient’s medical claim. Surgery Center alleged that Cigna, the subject ERISA plan, and the plan’s sponsor, were all obligated to produce the administrative record and subject to penalty for the failure to provide it upon request made only to Cigna. Only the plan sponsor, Sammons Corporation, was a plan administrator. The court held that because Section 1024 of ERISA does not list the administrative record as a document that must be provided, penalties cannot be imposed for failure to provide documents not listed in Section 1024. The court also held that Surgery Center failed to allege that it sufficiently requested the information from the plan administrator or the plan specifically or that Cigna had some sort of duty to forward the Surgery Center’s request to the plan administrator. Because Surgery Center’s request did not go to the plan administrator, it “cannot state a claim for statutory penalties…when it has requested documents…from the wrong party.”

Withdrawal Liability & Unpaid Contributions

Second Circuit

Trustees of New York City Dist. Council of Carpenters Pension Fund v. Earth Constr. Corp., No. 19-CV-5411 (ALC), 2020 WL 614740 (S.D.N.Y. Feb. 10, 2020) (Judge Andrew L. Carter, Jr.). The court granted Petitioners’ motion to confirm the arbitration award and awarded judgment “against Respondent in the amount of $132,325.46 pursuant to the September 25, 2018 arbitration award, with pre-judgment interest on the award at the rate of 7% and post-judgment interest to accrue pursuant to 28 U.S.C. § 1961. Petitioners are also awarded $3,487.50 in attorneys’ fees and $75 in costs.”

Third Circuit

Bd. of Trustees of Laborers’ Dist. Council Constr. Indus. Pension Fund v. VG Concrete, LLC, No. CV 19-04642, 2020 WL 610013 (E.D. Pa. Feb. 7, 2020) (Judge Gerald J. Pappert). The court granted Plaintiff’s motion for default judgment against VG Concrete in the amount of $151,225.07.

Fourth Circuit

Trustees of The National Automatic Sprinkler Industry Welfare Fund, et al. v. T & L Communications, Inc., et al., No. GJH-19-476, 2020 WL 618678 (D. Md. Feb. 10, 2020) (Judge George J. Hazel).  In this dispute over unpaid contributions, the court granted Plaintiffs’ Motion for Default Judgment and awarded “$250,711.99 in damages against all Defendants, consisting of $179,526.64 in damages for breach of the Settlement Agreement and promissory note, $52,020.44 in unpaid contributions, $14,235.83 in liquidated damages, $3,002.58 in interest, and $1,926.50 in costs and attorneys’ fees.”

Boilermaker-Blacksmith Nat’l Pension Tr. v. Becker Boiler Co., No. 19-2346-CM-JPO, 2020 WL 618565 (D. Kan. Feb. 10, 2020) (Judge Carlos Murguia).  In this dispute over withdrawal liability, the court denied Defendant’s motion to dismiss the complaint.  “Because the complaint alleges nonpayment of withdrawal liability despite an obligation to pay pending dispute and review, the Fund has sufficiently stated a claim for interim withdrawal liability payments. While fewer or different allegations may not survive dismissal, the instant complaint provides sufficient notice to enable response.”

Seventh Circuit

Trustees of Indiana Elec. Workers Pension Tr. Fund IBEW v. Darnell, Inc., No. 119CV04301JPHDML, 2020 WL 735696 (S.D. Ind. Feb. 13, 2020) (Judge James Patrick Hanlon). The court denied Plaintiffs’ motion for default judgment against Defendant for damages for unpaid contributions, liquidated damages, attorney fees and costs, and interest. In support, Plaintiffs provided only an affidavit from Plaintiffs’ plan administrator, which the court held was insufficient to support a default judgment for unpaid contributions because the court must be able to determine damages “from definite figures contained in the documentary evidence or in detailed affidavits.”  Without more, the court cannot determine damages to a “reasonable certainty.” Plaintiffs were granted time to renew their motion.

Eighth Circuit

Nesse, et al. v. Green Nature-Cycle, LLC, No. 18-CV-636 (ECT/HB), 2020 WL 733103 (D. Minn. Feb. 13, 2020) (Judge Eric C. Tostrud).  The court granted Plaintiffs’ Motion for Summary Judgment and declared Defendant liable to Plaintiffs for $23,489.21 in unpaid contributions found due and owing from March 2017 to the present; interest on all unpaid contributions; the greater of the interest on all unpaid contributions or liquidated damages provided for under the CBA, in accordance with the law; and reasonable attorneys’ fees and costs of the action.

Your ERISA Watch is made possible by the collaboration of the following Kantor & Kantor attorneys:  Brent Dorian BrehmBeth Davis, Sarah DemersElizabeth GreenAndrew Kantor, Susan Meter, Michelle RobertsTim Rozelle, Peter Sessions, and Zoya Yarnykh.

Get The Help You Need Today

Call Now Button