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Your ERISA Watch – Eighth Circuit Agrees with Retirement Plan Administrator that Claim for Disability Pension Was Untimely

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This week’s notable decision, DaPron v. Spire Missouri, Inc., No. 19-2166, __F.3d__, 2020 WL 3550693 (8th Cir. July 1, 2020), involves an unfortunate denial of disability retirement benefits simply because the plan participant submitted his claim for benefits after his employment terminated.

Harry DaPron worked for Laclede Gas for nearly 20 years before he resigned in March 2010. (Laclede Gas Company is now Spire Missouri, Inc.). At the time of his retirement, he suffered from severe mental health conditions and continued to suffer from those conditions for several years thereafter. He applied for Social Security Disability Insurance benefits in March 2012 and eventually received them. By May 2016, his sustained treatment made it such that he was well enough to apply for disability retirement benefits from Spire.

The Retirement Plan Committee for Spire, Inc. (Committee) denied DaPron’s claim because the Plan required a covered employee to apply for a disability pension before his employment terminated and because an employee would not be considered eligible for benefits without a timely application. DaPron appealed the decision and submitted over 1,000 pages of medical records. The Committee did not review the medical records because it relied on the Plan provision requiring that a disability application “be filed with the Plan Administrator at or around the time the Participant terminates employment.” DaPron then filed suit.

The district court ruled in favor of Defendants and DaPron appealed. On appeal, DaPron raised two issues.

First, DaPron argued that the Committee’s failure to review his medical records is a procedural irregularity constituting a breach of fiduciary duty. He further argued that a less deferential standard of review should apply. The court did not decide the standard of review issue because it found that this irregularity did not have any connection to the substantive decision reached by the Committee. The failure to review medical records from 2010 is not related to the Plan’s requirement that he file his claim in 2010. The Committee never deviated from this Plan requirement. Thus, the district court was correct that the Committee did not breach its fiduciary duty by failing to review the records.

Second, DaPron argued that there should be a remand because the Committee offered different reasons for denying his claim in litigation. The court disagreed. It found that the denial letters explained that the application was denied as untimely because it was not made before or in connection with DePron’s separation from employment. In litigation, the Committee argued that it was entitled to judgment as a matter of law by showing its interpretation of the Plan was reasonable and internally consistent with other Plan provisions. The court found that this is not a different position on why the claim was denied.

Despite sympathetic facts, this decision underscores that a court will enforce an ERISA plan according to its plain unambiguous terms.

On that note, enjoy the rest of this week’s case summaries. If you have a recent order from an ERISA case that you’d like to see included in Your ERISA Watch, send it to me at Until next week!

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

Breach of Fiduciary Duty

Fourth Circuit

Moore v. Virginia Community Bankshares, Inc., No. 3:19CV00045, 2020 WL 3490224 (W.D. Va. June 26, 2020) (J. Glen E. Conrad). Plaintiff, an employee and participant in an ERISA-governed employee stock ownership plan, filed a putative class action against the employer and related entities, alleging misconduct in the valuation of stock in the plan and loans to executives from the plan. Defendants filed a motion to dismiss, which the court denied. The court found that Plaintiff’s allegations were specific enough to state a claim for breach of fiduciary duty because they contained detail regarding the valuation of the stock at issue and Defendants’ failure to disclose information regarding the loans. The court further determined that even though the misconduct reached back to 2007, the action was still timely because Plaintiff only became aware of the misconduct in 2017 due to Defendants’ alleged fraudulent concealment. Finally, the court ruled that two of the defendants could not be dismissed because Plaintiff had sufficiently alleged that they exercised discretionary authority in the operation of the plan.

Seventh Circuit

Martin v. CareerBuilder, LLC, No. 19-CV-6463, 2020 WL 3578022 (N.D. Ill. July 1, 2020) (Judge Robert M. Dow, Jr.). Defendant brought a motion to dismiss Plaintiff’s class action which alleged Defendants paid too much for investments for the 401(k) defined-contribution retirement plan. Plaintiff claims Defendants violated fiduciary duties of prudence and loyalty as required by ERISA. The court found that the prudence standard is “processed-based, not outcome-based.” The court found that Plaintiff did not adequately plead a breach of the duty of prudence. The court found that Plaintiff only alleges that “some” of the funds under-performed. The court was unable to determine what would have been “objectively unreasonable” of Defendants’ actions. The court found that allegations may suggest Defendants did have a prudent process because it removed or modified a majority of funds at issue. The court found Plaintiff’s duty of loyalty claim likewise fails because Plaintiff does not provide more than an inference of self-dealing. The court found Plaintiff’s monitoring claim fails because he has not first adequately alleged an underlying fiduciary breach. The court determined dismissal with prejudice would be “overkill” and dismissed without prejudice.

Class Actions

Ninth Circuit

Marshall, et al., v. Northrop Grumman Corporation, et al., No. 216CV06794ABJCX, __F.Supp.3d__, 2020 WL 3630052 (C.D. Cal. June 30, 2020) (Judge Andre Birotte Jr.). In this class action alleging that the fiduciaries of Northrop Grumman’s 401(k) plan breached their fiduciary duties in the management of the plan, the court denied the parties’ joint motion for final approval of the over $12 million dollar settlement. The court explained that the parties’ proposed settlement agreement releases claims that go beyond the scope of the allegations in the operative complaint and contains an overly broad release of liability. “By releasing ‘any cause of action, demand, or claim on the basis of, connected with, or arising out of any of the Released Claims,’ the parties’ proposed settlement agreement ‘could capture claims that go beyond the scope of the allegations in the operative complaint, which the Ninth Circuit has held is inappropriate.’” The court rejected the parties’ response that any ambiguity regarding the scope of the released claims can be resolved by stipulating that the Released Claims are limited to the facts of the operative complaint because a court cannot substitute provisions of a proposed settlement agreement and “must consider the proposal as a whole and as submitted.”

Fourth Circuit

Fitzwater, v. CONSOL Energy,, No. 1:17-CV-03861, 2020 WL 3620078 (S.D.W. Va. July 2, 2020) (Judge John T. Copenhaver, Jr.). In this class-action over retiree health benefits, CONSOL Energy, Inc. and its subsidiaries (collectively, “CONSOL”) terminated CONSOL’s retiree health plan (the “Plan”). Plaintiffs previously brought a class certification motion that was partially approved and partially denied. This order is on Plaintiffs’ renewed motion for class certification where Plaintiffs asked the court to certify a new class not previously discussed in its first motion for class certification or its supplemental motion for class certification. The motion was filed long after the court’s deadline, after Defendants had already completed their summary judgment motion, and only weeks before the final pre-trial hearing. Plaintiffs justified the renewed motion by saying that new evidence clarified that a new sub-class should be certified but did not support their motion with any newly uncovered evidence. The court said the motion was a mere repackaging of previous unsuccessful motions, no new evidence had been offered, and that there was no basis for granting the renewed motion for class certification. The motion was denied.

Disability Benefit Claims

Third Circuit

Forman v. First Unum Life Insurance Company, No. 5:19-CV-02756-JDW, 2020 WL 3498113 (E.D. Pa. June 29, 2020) (Judge Joshua D. Wolson). Plaintiff sought long-term disability benefits which Defendant denied. Plaintiff’s medical history includes diagnoses of deep vein thrombosis (“DVT”), pulmonary embolism, and other serious impairments. Plaintiff’s physicians recommended that Plaintiff not take flights lasting more than five hours (Plaintiff’s occupation required international travel to China, India, Costa Rica, and Poland). Unum’s on-site physician reviewed the records and concluded Plaintiff could continue to travel if he took the required medications. Plaintiff appealed and submitted additional evidence in support of his inability to travel and risk of developing recurrent thrombosis. The court analyzed this case under the de novo standard of review. The parties submitted evidence that creates a factual dispute about Plaintiff’s ability to travel. In conducting a de novo review, a district court may not resolve factual disputes at the summary judgment stage. Because the court cannot resolve that issue, it cannot grant either party summary judgment and must conduct an evidentiary hearing.


Third Circuit

Dwyer v. Unum Life Insurance Co. of America, No. 19-4751-GAM (E.D. Pa. July 2, 2020) (Judge Gerald Austin McHugh). Defendant denied Plaintiff long-term disability benefits. The parties stipulated to de novo review and submitted stipulations concerning discovery. They asked the court to resolve continuing disagreements regarding the scope of discovery. In broad terms, the parties take opposite positions as to whether discovery should be granted sparingly or liberally. Intuitively, it was unclear to the court why there should be a presumption against discovery when the review is de novo. The court was persuaded that Plaintiff was entitled to a “yes” or “no” answer to interrogatories relating to Plaintiff’s situation, where short-term disability benefits have been approved but long-term disability benefits then denied for failure to satisfy the elimination period. The court held that Plaintiff was not entitled to conflict of interest discovery in a de novo review case where bias is irrelevant. The court denied discovery of the medical consultants’ personnel files and performance assessments because these requests also focused on bias. The court sided with Plaintiff in the request for a copy of a 2004 Regulatory Settlement Agreement, as that could be useful in determining how the policy should have been properly interpreted. The court did not see any basis for Unum to prevent depositions of its medical consultants (Scott Norris, MD and Peter Brown, MD), as their findings regarding Plaintiff’s non-disability went to the heart of the matter. A deposition of a corporate designee was also appropriate, as well as discovery relating to the completeness of the administrative record and affirmative defenses.

Exhaustion of Administrative Remedies

Ninth Circuit

Hasten v. Prudential Insurance Company of America, Case No. 19-cv-07943-JSW, _F.Supp.3d_, 2020 WL 3786229 (N.D. Cal. July 6, 2020) (Judge Jeffrey S. White). In this disability benefit dispute, Defendant moved to dismiss Plaintiff’s complaint under Section 502(a)(1)(B) for Plaintiff’s alleged failure to exhaust administrative remedies. Plaintiff filed suit after Defendant issued a late determination on her claim. Prudential also took extensions of time without identifying special circumstances that required the extensions. Plaintiff filed her complaint about one week after Prudential finally issued a decision. She also submitted an administrative appeal. Plaintiff argued that she was not required to await Defendant’s determination on her appeal, as Defendant’s failure to provide a timely decision was a violation of the 2018 ERISA Regulations which explicitly require “strict” compliance with the deadlines. The court found that the Regulations provide that the proper remedy for such a violation is that the claimant shall be deemed to have exhausted administrative remedies under the Plan. The court found for Plaintiff, holding that Defendant did violate the regulations and was not subject to a “de minimis” exception for harmless errors; as such, the remedy set forth by the regulations must be enforced.

Pension Benefit Claims

Second Circuit

Latronica v. Local 1430 Int’l Bhd. of Elec. Workers Pension Fund, No. 19-2978-CV, __F.App’x__, 2020 WL 3526393 (2d Cir. June 30, 2020) (Panel Ralph K. Winter, Guido Calabresi, and Denny Chin). The Second Circuit affirmed the district court’s decision that the plaintiff in this case was entitled to his full pension because he was engaged in covered employment for more than 30 years. Latronica is a retiree who worked for several employers during his career, some of whom had entered a collective bargaining agreement with the Local 1430 International Brotherhood of Electrical Workers Pension Fund (the “Fund”). The Fund is a multi-employer pension plan. When Latronica retired and applied for his pension benefits, the Fund only approved his claim with 16 years and 7 months of service credit rather than the 30 years of service credit he was expecting because mid-career Latronica “became a supervisor” and therefore was not an eligible “participant” or engaged in “covered employment” as defined by the Plan. The trial court found that the Fund’s decision was arbitrary and capricious because the plan did not exclude managers and the determination that Latronica was a manager was based on speculation. The appellate court affirmed that decision, dismissed the appeal, and remanded the issue of appropriate attorney’s fees to the lower court.

Third Circuit

Wright v. Elton Corp., No. CV 17-286-JFB-SRF, 2020 WL 3574746 (D. Del. July 1, 2020) (Judge Sherry R. Fallon). The court considered defendant First Republic’s request to appoint a successor trustee of an ERISA-governed pension plan. The court denied the request because First Republic must provide a “suitable and trustworthy replacement” before it can resign and failed to do so. First Republic did not suggest a successor for the court to appoint. The court relied on the trust which, in relevant part, states: “Any Trustee named herein shall have the right to resign at any time and shall have the further right to name his or her successor.”

Eighth Circuit

DaPron v. Spire Missouri, Inc., No. 19-2166, __F.3d__, 2020 WL 3550693 (8th Cir. July 1, 2020) (Before Kelly, Melloy, and Kobes, Circuit Judges). See Notable Decision summary above.

Provider Claims

Ninth Circuit

Cal. Spine & Neurosurgery Inst. v. Blue Cross of California, et al., Case No. 19-15192, __F.App’x__, 2020 WL 3536496 (9th Cir. Jun. 30, 2020) (Before Circuit Judges A. Wallace Tashima, Danielle J. Hunsaker and District Judge James V. Selna). In what was surely a positive outcome for providers of medical services, the court heard an appeal from a district court’s decision that concluded that the ERISA plan’s anti-assignment provision required dismissal of the action and that Blue Cross had neither waived the anti-assignment provision, nor could be equitably estopped from asserting the provision. California Spine alleged that it notified Blue Cross it would provide surgical services to a member of an ERISA plan administered by Blue Cross. Later, California Spine submitted a reimbursement claim to Blue Cross indicating it was acting as the member’s assignee, and Blue Cross partially denied the claim on a basis other than the anti-assignment provision. Citing Ninth Circuit caselaw (set by the efforts of Kantor & Kantor), the court held that these allegations were sufficient to plead that Blue Cross waived its ability to rely on the anti-assignment provision. See Harlick v. Blue Shield of Cal., 686 F.3d 699, 720 (9th Cir. 2012) (“ERISA and its implementing regulations are undermined where plan administrators have available sufficient information to assert a basis for denial of benefits, but choose to hold that basis in reserve rather than communicate it to the beneficiary.” (internal quotation marks and citations omitted)). The court also held that the district court in considering only three of the equitable estoppel factors articulated in Gabriel v. Alaska Elec. Pension Fund, 773 F.3d 945, 955-57 (9th Cir. 2014) (setting forth equitable estoppel factors in an ERISA action) rendered the record insufficiently complete to determine whether the district court erred in its analysis of California Spine’s claim for equitable estoppel. The remaining equitable estoppel analysis was remanded to the district court.


Fifth Circuit

Cigna Healthcare of Texas, Inc. v. VCare Health Services, PLLC, No. 3:20-CV-0077-D, 2020 WL 3545160 (N.D. Tex. June 29, 2020) (J. Sidney A. Fitzwater). Cigna sued several health care providers for equitable relief under ERISA, alleging that they engaged in fraudulent billing, illegal “fee forgiveness,” dual-pricing, and other misconduct. Two of the defendants filed a motion to dismiss, which the court granted in part. The court found that Cigna had insufficiently pled that an equitable lien by agreement existed because its allegations were conclusory and unsupported by specific facts. The court also found that Cigna had insufficiently pled that an equitable lien by restitution existed because Cigna could not plausibly allege that the money it sought to recover was traceable to funds in Defendants’ possession. The court declined to reach Defendants’ arguments regarding Cigna’s claim for declaratory relief as it appeared to be duplicative of other claims. The court also declined to exercise supplemental discretion over Cigna’s state law claims for the moment because all of its federal law claims had been dismissed. The court gave Cigna leave to amend.

Retaliation Claims

Seventh Circuit

Peters v. Life Care Centers of America, Case No. 1:20-CV-75-HAB, 2020 WL 3498444 (N.D. Ind. Jun. 29, 2020) (Judge Holly A. Brady). Before the court was Peters’ second motion for leave to amend his complaint in a suit alleging that he was terminated from his employment with Defendant Life Care Centers of America, Inc. (“LCCA”), in part, in retaliation after Peters complained that LCCA denied him access to its employee benefits plan (the “Plan”). LCCA twice moved to dismiss Peters’ complaints with Peters responding both times by moving to amend his then-pending complaint to address LCCA’s concerns. LCCA’s opposition to Peters’ second request for leave to amend can be reduced to two essential positions: LCCA claims that Peters’ requested amendment was (1) untimely and (2) futile. Here, the court granted Peters’ motion for leave holding that Peters filed his request to amend only four days after the applicable amendment deadline, and less than two weeks after LCCA’s most recent motion to dismiss. This time frame, the court held, was sufficiently diligent under the applicable good cause standard found in FRCP 16(b). The court also held that Peters’ motion for leave to amend was not futile holding that Peters’ proposed amendments recite factual allegations sufficient to show that he was offered no “meaningful access to review procedures” that would allow him to exhaust administrative remedies under a plan he was allegedly not even allowed to enroll in.

Statute of Limitations

Tenth Circuit

Zisumbo v. Convergys Corp., No. 1:14-CV-00134, 2020 WL 3546794 (D. Utah June 30, 2020) (Judge Robert J. Shelby). Plaintiff sued Convergys Corp. for interference with her rights under the Family and Medical Leave Act (FMLA), violations of ERISA, and common law negligence. In resolving cross motions for summary judgment, the court dismissed the ERISA action as time-barred. Defendant argued that an online job application Plaintiff completed in 2012 established a six-month statute of limitations via a provision stating, “any claim or lawsuit relating to my employment with Convergys…must be filed no more than six (6) months after the date of the employment action that is the subject of the claim or lawsuit.” Plaintiff argued that, under the federal discovery rule, her ERISA claim did not accrue until 2018. Citing Heimeshoff, Defendant noted the parties can contractually agree to both the limitations period and the commencement of that period—even if the limitations period begins to run before the claim accrues. Plaintiff did not address Heimeshoff either to argue it was inapplicable or that the contractual provision at issue was unreasonable—and therefore unenforceable—under Heimeshoff. Noting this failure, “this court abstains from making arguments for parties that the parties have not made themselves.” As a result, the court credited Defendant’s argument that Plaintiff’s ERISA claim was time-barred.

Subrogation/Reimbursement Claims

Eleventh Circuit

Chiron Recovery Ctr., LLC v. United Healthcare Servs., Inc., No. 9:18-CV-81761, 2020 WL 3547047 (S.D. Fla. June 30, 2020) (Judge Robin L. Rosenberg). Chiron, a medical provider, sued United Healthcare Services on several grounds, including alleged improper billing practices related to claim offsets. Chiron had power of attorney via assignments. On a 12(b)(6) motion, the court dismissed Chiron’s ERISA breach of fiduciary duty claim for three reasons (1) because it was a shotgun pleading, (2) because other claims under (a)(1)(B) provided the individual plaintiffs full relief, and (3) because the action sought relief for individuals Chiron did not have power of attorney for and the suit was not a class action. Shotgun pleading exists when multiple parties or multiple claims for relief are merged into a single count. This prevents the court from determining who is claiming what wrong. The court also dismissed eight of the eleven individual (a)(1)(B) claims because of anti-assignment clauses in the individual claimant’s plans. The two counts premised on assignments from individual plaintiffs who did not have anti-assignment provisions survived.


Ninth Circuit

Lowell, et. al., v. United Behavioral Health, No. 20-CV-01989-YGR, 2020 WL 3504624 (N.D. Cal. June 29, 2020) (Judge Yvonne Gonzalez Rogers). Plaintiff filed suit to contest the denial of health insurance benefits under her employer’s plan. Defendant filed a motion to transfer venue from the Northern District of California, where UBH was headquartered, to either Washington or Montana, where Plaintiffs lived. Applying the factors relevant to this determination in the Ninth Circuit, the court denied the motion. In doing so, it noted:

  1. Defendant’s assertion that Plaintiff chose this forum to benefit from a specific decision, even if true, is not a disqualifying factor and is only minimally relevant.
  2. The action bears a relationship to the Northern District because UBH is a California Corporation with its principal place of business in that district. This outweighed the fact that Plaintiffs reside in Washington and Oregon.
  3. Defendant cannot argue convenience of the parties on behalf of the other party. Defendant’s argument that the transfer would be more convenient for Plaintiffs was unavailing.
  4. There are not witnesses in an ERISA action, so the convenience of witnesses is minimally relevant.
  5. California has as much interest in regulating the conduct of its corporations as Washington or Montana would have in protecting its residents.

Withdrawal Liability & Unpaid Contributions

Second Circuit

Trustees Of The New York City District Council Of Carpenters Pension Fund, Welfare Fund, Annuity Fund, And Apprenticeship, Journeyman Retraining, Educational And Industry Fund, et al. v. Phillips, No. 19 CIV. 4016 (VM), 2020 WL 3619046 (S.D.N.Y. July 2, 2020) (Judge Victor Marrero). The court confirmed the arbitration award and granted Petitioners $716,865.41 plus interest from the date of the Award through the date of judgment with interest to accrue at the annual rate of 7.5% pursuant to the Award; $75 in costs; $2,972.50 in attorneys’ fees; and post-judgment interest at the statutory rate.

Trustees Of The New York City District Council Of Carpenters Pension Fund, Welfare Fund, Annuity Fund, And Apprenticeship, Journeyman Retraining, Educational And Industry Fund, et al. v. Concrete Brothers Construction LLC, No. 20-CV-2196 (JGK), 2020 WL 3578200 (S.D.N.Y. July 1, 2020) (Judge John G. Koeltl). The court confirmed the arbitration “award dated November 12, 2019, in the amount of $195.095.49, plus interest from the date of the arbitration award, namely November 12, 2019, accrued at an annual rate of 7.5% until the date of judgment. The Clerk is also directed to enter judgment in favor of the petitioners and against the respondent in the amount of $629 in attorney’s fees and $75 in costs.”

Trustees of New York City Dist. Council of Carpenters Pension Fund, Welfare Fund, Annuity Fund, & Apprenticeship, Journeyman Retraining, Educ., & Indus. Fund v. Inner City Concepts LLC, No. 19 CIV. 7997 (ER), 2020 WL 3504716 (S.D.N.Y. June 29, 2020) (Judge Ramos). The court granted Petitioners’ motion to confirm the arbitration award and directed the Clerk of the Court “to enter judgment in favor of the petitioners in the amount of $2,416,11.21 against Inner City plus interest at a rate of 7.5% per annum accruing from July 18, 2019 until the date of entry of judgment. The Clerk is also directed to add $880 in attorney’s fees and $75 in costs to that amount.”

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


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