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Your ERISA Watch – In Mental Health Treatment Dispute, Tenth Circuit Holds De Novo Review Applies Where There Is No Notice of Discretionary Authority

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This week we highlight a notable circuit court decision involving a denial of a mental health claim.  The Tenth Circuit case, Lyn M. v. Premera Blue Cross, No. 18-4098, __ F.3d __, 2020 WL 4249129 (10th Cir. July 24, 2020), involves denial of mental health treatment for L.M., a teenage girl who has suffered from mental illness from an early age. Her condition was serious enough that she became a danger to herself, even attempting suicide at one point. Her parents eventually placed her in Eva Carlston Academy, a Utah school that specializes in educating and treating adolescent girls such as L.M. Her parents then submitted a claim for benefits to Premera, which Premera denied ten days into her stay on the ground that her treatment was not “medically necessary.” (Premera covered the first eleven days “as a courtesy.”) The parents appealed the decision, but Premera upheld it.

The parents filed suit against Premera under ERISA and the parties filed cross-motions for summary judgment. The district court (Hon. Bruce S. Jenkins) granted Premera’s motion, and denied the parents’ motion, finding that the arbitrary and capricious standard of review was the applicable standard, and that Premera’s denial was not unreasonable under that standard.

The parents appealed, and the Tenth Circuit reversed on two grounds. First, the court ruled that the district court had used the wrong standard of review. The court acknowledged that the formal plan document contained a grant of discretionary authority, which ordinarily would trigger the deferential review used by the district court. However, “the members had no way of knowing that the Plan Instrument even existed” because they were never given a copy. Instead, they were given a summary plan description (SPD) which “said nothing about the existence of the Plan Instrument or any other plan document reserving discretion to the plan administrator.” Because the parents were not given any documents describing the plan’s grant of discretionary authority, the arbitrary and capricious standard of review was inapplicable.

The court rejected Premera’s argument that the SPD informed the parents that they could have requested the formal plan document at any time and learned about the grant of discretionary authority. The court noted that this request provision was not located in the “judicial review” section of the SPD, and thus did not reasonably suggest the existence of another document that might alter the standard of review.

Ordinarily, one would expect an appellate court to stop here, and remand to the district court with instructions to look at the case again under the default, less deferential, de novo standard of review. However, the Tenth Circuit went on to hold that the district court erred in concluding that Premera used the correct criteria in making its medical necessity determination—an error that “would require reversal even if the arbitrary-and-capricious standard had otherwise applied.”

This was because even though Premera had developed a medical policy for use in interpreting the plan definition of medical necessity, Premera “did not apply the medical policy’s specific criteria when deciding the parents’ administrative appeal.” Instead of applying the medical policy’s specific criteria, it relied solely on the SPD’s more general criteria. The court found that “the determination of medical necessity must be based on both the summary plan description’s general criteria and the medical policy’s specific criteria,” and that by only relying on the former Premera had acted arbitrarily and capriciously.

Based on these two rulings, the Tenth Circuit reversed and remanded, with instructions to the district court to conduct a de novo review. Notably, the court stated that on remand “the district court can explore options unavailable to us, such as conducting a bench trial or permitting additional evidence.”

The Tenth Circuit’s ruling was not unanimous, however. Judge Eid dissented, complaining that the decision “imposes a new duty on plan administrators” to notify beneficiaries of non-SPD documents that might affect the standard of judicial review. Judge Eid contended that ERISA only requires administrators to make plan documents available to beneficiaries and does not require administrators to “specifically notify them that those other documents may impact review of their claim in the courts.” Judge Eid warned that the decision “lacks a limiting principle” because “[o]nce specific notice of a document impacting judicial review is required, it is but a short jump to requiring specific notice of documents impacting other participant rights.”

The Lyn M. summary was prepared by Kantor & Kantor attorney, Peter Sessions. Peter has been practicing in the insurance and ERISA-related fields of law for more than 20 years and has special expertise in appellate litigation.

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

Attorneys’ Fees

Third Circuit

Askew v. R.L. Reppert, Inc., No. 5:11-CV-04003, 2020 WL 4050605 (E.D. Pa. July 17, 2020) (Judge Joseph F. Leeson, Jr.). After years of litigation, including a trip to the Third Circuit, Plaintiff made a motion for attorneys’ fees. While Plaintiff had achieved some success on the merits (recovering $15,959.00 in penalties for failure to disclose documents), the court denied the motion because the five-factor test for attorneys’ fees was not in his favor. The first, second, third, and fifth factors were either neutral or weigh against an award of attorneys’ fees and costs: (1) Defendant’s conduct was not culpable or in bad faith because it tried to work with Plaintiff to determine what documents it needed to provide; (2) neither party established that Defendant, a privately held family business, had, or did not have, an ability to pay the attorneys’ fees and costs of the litigation; (3) an award of attorneys’ fees would not have a deterrent effect on future litigants because Defendant was reasonably ignorant of the law; and (5) though incorrect, Defendant’s position was not unreasonable. Factor (4), the result of this litigation would benefit future claimants and plan members, supported granting Plaintiff’s motion, but was substantially outweighed by the other factors. Because the court determined imposing attorneys’ fees and costs on Defendant was inappropriate, the analysis of whether the requested fees was reasonable was immaterial. The action did not present “exceptional circumstances” to support an attorneys’ fee award.

Sixth Circuit

Ross v. Ross, No. 5:19-CV-261-JMH, 2020 WL 4067719 (E.D. Ky. July 20, 2020) (Judge Joseph M. Hood). After the insured of a life insurance policy died, his former wife sued his wife at the time of his death for a declaration that she was entitled to the life insurance proceeds. The court rejected that claim and the Defendant filed a motion for attorneys’ fees. The court denied the motion because ERISA attorneys’ fees are typically awarded where a plaintiff who sought benefits was awarded them pursuant to ERISA, and had to engage in litigation to vindicate her rights as a beneficiary. The losing defendant typically would have violated ERISA, depriving a plaintiff of rights pursuant to a federal statue. That was not the case herein. The court declined to sanction Plaintiff with attorneys’ fees because she had not violated ERISA. The court also determined the action was not frivolous, and thus Plaintiff bearing her own attorneys’ fees, costs, and simply time spent pursuing litigation was sufficient deterrent.

Disability Benefit Claims

Fifth Circuit

Caskey v. Prudential Ins. Co. of Am., No. CV 18-694-JWD-RLB, 2020 WL 4088954 (M.D. La. July 20, 2020) (Judge John W. deGravelles). Plaintiff filed this suit seeking judicial review of the decision by Defendant to terminate his long-term disability benefits insured and administered by Prudential. Plaintiff’s claim for LTD benefits was based on tinnitus, depression, anxiety and ADHD. The court reviewed this matter under the abuse of discretion standard because Defendant had sole discretion to determine eligibility for benefits. Defendant argued that there was no conflict except a structural one given the many different physician reviews and “rigorous investigation” of Plaintiff’s claim, which contradicted any assertion of bias. Plaintiff argued for a de novo standard of review and further, that even under a stricter standard, Prudential abused its discretion in terminating benefits. Plaintiff also provided case law where the peer reviewers rendered adverse reports, but the court declined to find bias on that basis, since only adverse determinations result in litigation. Thus, the court determined that conflict of interest was not a significant factor. Under the standard of review that restricts the court, the court cannot say that Prudential made an arbitrary decision or that its decision was not supported by substantial evidence. The administrative record shows that Plaintiff required hearing protection in noisy environments and noise breaks of 15 minutes every two hours when he was exposed to a loud noise environment. As found by the independent reviewers, the mental health records do not support any limitations to Plaintiff’s ability to work in his occupation. Therefore, given that Plaintiff’s work was primarily confined to an office space, and hearing protection was required in loud noise environments, there is a rational connection between the evidence and Prudential’s decision.


Ninth Circuit

Scalia v. Saakvitne, No. CV 18-00155 SOM-WRP, 2020 WL 4193118 (D. Haw. July 21, 2020) (Judge Susan Oki Mollway). In this suit where the Secretary of Labor is suing two individuals, a consulting company, an ESOP and its trustee, and the trustee’s company for breaches of fiduciary duty related to the overvaluation of a company which the ESOP purchased a 100% ownership interest, the district court affirmed the Magistrate Judges’ Discovery Order allowing production of redacted items. Scalia challenged the portion of the Discovery Order addressing attorneys’ fees, arguing that the award should be rejected or reduced. The court adopted the Magistrate Judge’s recommendation to award Defendants Bowers and Kubota fees and costs but reduced the fee award from $139,561.20 to $63,509.25. The court applied the following prevailing market rates in Honolulu: $425 for the “Partner-in-Charge” with 34 years of experience, $400 for a “Partner” with 39 years of experience, $300 for “Of Counsel” with 34 years of experience, a “Partner” with 28 years of experience, and $250 for a “Partner” with 15 years of experience and a former “Partner” with an unknown amount of experience.

Tenth Circuit

D.K., et al., v. United Behavioral Health & Alcatel-Lucent Medical Expense Plan For Active Management Employees, No. 217CV01328DAKJCB, 2020 WL 4201263 (D. Utah July 22, 2020) (Judge Dale A. Kimball). In this dispute alleging a Parity Act claim, among other claims, concerning the denial of mental health treatment, the court granted in part and denied in part Plaintiffs’ Motion for Leave to Conduct Discovery. “Plaintiffs seek from January 1, 2013 to the present: (1) information about Defendants’ administration of medical/surgical claims; (2) information about residential treatment coverage criteria; (3) information that Defendants claim is confidential, proprietary, and business-sensitive; (4) information about hospice care coverage criteria; and (5) information about the processing of claims for certain types of programs/facilities and about policies and plans unrelated to the Plan.” The court agreed that discovery is appropriate on Plaintiffs’ Parity Act claim and, with one exception, the discovery Plaintiffs seek is relevant and proportional to the needs of the case. The court did not allow discovery about the processing of claims for outdoor behavioral healthcare programs, wilderness programs, transitional living programs, or other sub-acute inpatient treatment facilities or programs for mental health or substance use disorders or about coverage determinations under other policies or plans for which UBH is acting as a third-party administrator. Plaintiffs agreed to limit discovery to the timeframe of 2014 to the present, so the court ordered production based on this timeframe.

ERISA Preemption

Second Circuit

The Trundle & Co Pension Plan, et al. v. Emanuel, No. 18 CIV. 07290 (ER), 2020 WL 4218273 (S.D.N.Y. July 23, 2020) (Judge Edgardo Ramos). This is a dispute between two trustees of a company’s pension plan, where one trustee, Trundle, alleges that the other trustee, Emanuel, transferred money out of the plan, hid the transaction from her, and then refused to transfer Trundle’s life insurance policy without an additional payment of $100,000. On Trundle’s motion for leave to file her First Amended Complaint alleging claims of economic duress and fraud, the court agreed that both causes of action are expressly preempted by ERISA and that the Amended Complaint insufficiently pleads fraud. On preemption, the court found that Trundle, as administrator, beneficiary, and trustee of the Plan, can bring an ERISA enforcement claim. Her common law claims can be construed as a colorable claim for benefits under Section 502(a)(1)(B) or Section 502(a)(2) of ERISA. Further, there is no other independent legal duty implicated by Emanuel’s actions. The court denied the motion with prejudice.

Sixth Circuit

Lowe v. The Lincoln National Life Insurance Company, No. 19-6249, __F.App’x__, 2020 WL 4192060 (6th Cir. July 21, 2020) (Before Circuit Judges Moore, Clay, and Murphy). Plaintiff was receiving disability benefits from Defendant, until Defendant wrote to Plaintiff, informing her that her claim would be terminated soon because of a limitation in the policy. In the letter, Lincoln referred to purported guidelines set forth by the “American Psychiatric Foundation Return to Work Taskforce,” which it subsequently admitted did not exist. Plaintiff filed suit alleging multiple state law claims. Defendant moved to dismiss based on ERISA preemption. Plaintiff argued that her case was distinguishable because she was not suing for the denial of benefits, but for the tortious conduct involved with the benefit denial. The court held that any such action arises out of a refusal to pay benefits and is thus preempted.

Adena Corp. v.  Ashley Insurance Group, Ltd., Case No. 1:20-cv-1035, 2020 WL 4187421 (N.D. Ohio, Jul. 21, 2020) (Judge James S. Gwin). Plaintiff Adena Corporation, an Ohio construction company, sued Defendant Ashley Insurance Group, a benefits consulting company, in state court. Defendant removed the case to this Court. Here, Adena Corporation moved to remand the case to state court arguing that its claims did not give rise to federal question jurisdiction. Adena had hired Ashley Group to advise it regarding its employee health benefits plan. Adena asked Ashley Group to ensure that its plan was fiscally sound and complied with federal and state laws and regulations, including ERISA. In 2018, the Department of Labor audited Adena’s benefits program and assessed a fine of $357,428.78 for the program’s noncompliance with federal law. Specifically, the DOL found that Adena’s nicotine surcharge for employees, a surcharge Ashley Group had assured Adena complied with relevant regulations, violated ERISA’s nondiscrimination requirements. Adena’s complaint against Ashley Group asserted three causes of action: breach of contract, negligence, and promissory estoppel. The court held in Adena’s favor remanding the case to state court on the grounds that: (1) Adena’s state contract-based claims were not disguising federal causes of action, (2) complete preemption did not apply because Adena alleged violations of a consulting contract and the consulting services only merely happened to involve ERISA expertise, and (3) the question of whether Adena’s plan violated federal regulations—an issue already decided by the DOL—did not raise substantial federal question.

Eleventh Circuit

Surgery Center of Viera, LLC v. Cigna Health and Life Insurance Company, Inc., No. 620CV152ORL37EJK, 2020 WL 4227428 (M.D. Fla. July 23, 2020) (Judge Roy B. Dalton Jr.). In this dispute, the plaintiff Surgery Center brought state law claims against a self-funded employee benefit plan and its administrators, including Cigna, for underpaying the cost of surgery for a plan participant. Defendants moved to dismiss based on ERISA preemption. The court addressed the Surgery Center’s argument that there is no preemption since this is not a “right of payment” dispute, rather it is a dispute over the “rate of payment.” The court stated: “This argument is a bait-and-switch. True—recent case law has established the rate/right distinction, but only in complete preemption cases where the issue was subject matter jurisdiction. [] Something SCV takes pains to obscure. [] This ‘hide the ball’ selective editing invites the Court into error by intentionally conflating the jurisdictional analysis necessary in removal cases with the ‘related to’ analysis appropriately applied to defensive preemption claims.” (internal citations omitted). The court found that the court’s “defensive preemption” analysis is not limited to the narrow right/rate test. The court concluded that Defendants’ claims for breach of contract, unjust enrichment, and quantum meruit are defensively preempted because the claims are related to and intertwined with the ERISA plan. However, the Surgery Center’s status as a medical provider changes the result because misrepresentations by an insurance company to the provider that a procedure would be covered can be too tenuously connected to ERISA to be defensively preempted. The court found that the Surgery Center could re-allege some of the claims to establish a factual basis independent of the Plan contract (i.e., an independent agreement between the Surgery Center and Defendants) that would survive ERISA preemption. Lastly, the court dismissed with prejudice the claim alleging violation of Florida’s insurance code since it requires determination of coverage under the terms of an ERISA plan.

Medical Benefit Claims

Ninth Circuit

Jamie F. v. United Healthcare Ins. Co., No. 19-CV-1111-YGR, 2020 WL 4249200 (N.D. Cal. July 23, 2020) (Judge Yvonne Gonzalez Rogers). See our Press Release about this firm victory.

Tenth Circuit

Lyn M. v. Premera Blue Cross, No. 18-4098, __ F.3d __, 2020 WL 4249129 (10th Cir. July 24, 2020) (Before Circuit Judges Lucero, Bacharach, and Eid). See Notable Decision summary above.

Pension Benefit Claims

Third Circuit

Procter & Gamble U.S. Bus. Servs. Co. v. Estate of Rolison et al., Case No. 17-CV-762, 2020 WL  4195887 (M.D. Pa., Jul.  21, 2020) (Judge Robert D. Mariani). Jeffrey Rolison was an employee at Procter & Gamble (P&G) for nearly 30 years leading up to his death in 2015. Over the course of his employment, Rolison accumulated a total of $754,006.56 in benefits plans’ savings, which, as a result of his death, were to be distributed to his beneficiary or beneficiaries. As of 1987, the named beneficiary of the Plans, as indicated by a paper document filled out and signed by Rolison, was Margaret M. Sjostedt, now known as Margaret M. Losinger. Throughout the course of his 29-year employment, Rolison was periodically informed by P&G, even as recent as August 2015, that: “A primary beneficiary for [the Plans] has not been designated online. . .. Beneficiaries designated using paper forms are still valid but will not be reflected on this statement unless they are entered into the online system, if available for [the Plans].” Here, before the court in P&G’s interpleader action, were cross-motions for summary judgment filed by Defendants Estate of Jeffrey Rolison, Margaret M. Losinger, and Mary Lou Murray, filed to determine who, of the Defendants, was entitled to the Plans’ funds in the wake of Rolison’s death. The court held that (1) Losinger showed, by clear designation, that she was the beneficiary under the Plans and therefore entitled to the funds, (2) the Estate had failed to present sufficient evidence to show a genuine dispute of fact for trial as to whether Rolison changed this designation or substantially complied with the policy in attempting to change this designation and (3) Murray similarly failed to create a genuine dispute for trial regarding the existence of a common law marriage which could allegedly overcome the designation. Summary judgment was entered as a matter of law in favor of Losinger.

Eighth Circuit

Durham v. Laborers’ Benefits St. Louis, Inc., No. 4:18CV1184 HEA, 2020 WL 4049891, (E.D. Mo. July 20, 2020) (Judge Henry Autrey). Mr. Durham was a participant in the Construction Laborers’ Pension Trust of Greater St. Louis (“the Trust”), a Taft-Hartley employee benefit plan. Mr. Durham’s pension benefit was incorrectly calculated when he applied for benefits. He appealed the Trust’s decision to reduce his monthly pension benefit to the correctly calculated amount, and the Trust denied his appeal. Mr. Durham brought this lawsuit to force the Trust to reinstate his incorrect pension benefit calculation. On summary judgment, the court found there was no genuine dispute that Durham was not entitled to the miscalculated pension benefit. Durham had not offered evidence to show the alternative pension calculation should be used. His equitable estoppel claim was found to fail as a matter of law because awarding Durham the incorrect pension benefit because Durham did not have a plausible interpretation of the plan language that would allow the Trust to pay him that amount. Equitable estoppel cannot be used to rewrite the plan language to allow an incorrect benefit to be paid. Judgment was entered in favor of the Trust.

Pleading Issues & Procedure

Third Circuit

In Re: Aetna UCR Litigation, No. 07CV3541KSHCLW, 2020 WL 4199741 (D.N.J. July 22, 2020) (Judge Katharine S. Hayden). The court’s order relates to Ohai v. Aetna Life Ins. Co. & Hyatt Corp., a lawsuit concerning Aetna’s out-of-network payment rates for benefits under an ERISA plan offered by Hyatt. The court found Ohai has taken no discernable action to prosecute her case since it was removed to federal court. Defendants request the action be dismissed for lack of prosecution. The court considered the Third Circuit’s six Poulis factors to determine whether a case should be dismissed under Rule 41(b) and found that each factor favored dismissal. The court also found the local rules favor dismissal. The court concluded Ohai’s complaint shall be dismissed.

Eleventh Circuit

University of South Alabama v. O’Reilly Automotive, Inc., No. 1:18-CV-500-TFM-C, 2020 WL 4053658 (S.D. Ala. July 20, 2020) (Judge Terry Moorer). In an action regarding reimbursement of medical costs, USA Health (University of South Alabama) filed suit against USAA for non-payment of funds due according to uninsured motorist coverage the original claimant secured through USAA. O’Reilly Automotive was named as a third-party defendant, as it was the primary health insurance provider. USAA acknowledged owing the funds but claimed there was a dispute regarding the proper recipient. Eventually USAA was dismissed from the suit leaving only USA Health and O’Reilly. O’Reilly removed the action to federal court under ERISA. The court sua sponte raised the issue of whether the case should be remanded to state court because third-party defendants cannot remove to federal court according to Eleventh Circuit precedent. The court held “Since jurisdiction is determined at the time of removal, then remand is mandatory, irrespective of what transpires post-removal. The fact the parties were eventually realigned to name O’Reilly as the Defendant does not change that it was originally a third-party defendant who is precluded from removing this action.”

Statute of Limitations

Second Circuit

Van Kirk v. T. Rowe Price Assocs., Inc., No. 1:20-CV-00062-AMD-LB, 2020 WL 4041304 (E.D.N.Y. July 17, 2020) (Judge Ann M. Donnelly). A pro se plaintiff brought suit against Defendants claiming that they wrongfully disbursed his retirement benefits from his 401(k) plan in 2012 in response to a power of attorney authorizing disbursement of his funds that he did not execute and he did not receive the funds. The court found that it had subject matter jurisdiction over the case, because even though Plaintiff did not allege a claim under ERISA, his 401(k) plan is a common defined contribution plan that qualifies for ERISA protections. Plaintiff must have filed his lawsuit within six years of the date that Plaintiff discovered Defendants’ mistake. His complaint does not specify this date, but the court noted that there is a letter from Defendants dated in 2019 which may have been the date Plaintiff was alerted to the breach. The court gave Plaintiff 30 days to amend his complaint.

Statutory Penalties

Seventh Circuit

Griffin v. TeamCare, No. 19-2905, __F.App’x__, 2020 WL 4251959 (7th Cir. July 24, 2020) (Before Ripple, Hamilton, Scudder). The court found that the district court did not abuse its discretion in awarding only $3,555 in penalties pursuant to 29 U.S.C. §§ 1024(b)(4), 1132(c) for failing to provide Griffin, a medical doctor, with the plan description until 187 days after her first request; information about its “methodology for determining reasonable and customary allowances” after 716 days; and the claims-processor agreement after 743 days. The district court found that there was no bad faith or prejudice to Griffin, so it assessed only a $5/day penalty rather than the maximum statutory penalty of $110/day. The court explained that fines are not mandatory, and courts may impose any penalty that will deter noncompliance. The court found that Griffin waived the argument that the court had to assess a separate penalty for each document request to which Defendant failed to respond within 30 days but she is correct that each delayed response can establish a separate violation under § 1132(c)(1).  However, the court was not obligated to assess a separate penalty and it was not unreasonable to levy a single penalty for what even Griffin treated as a single course of conduct. The district court did not abuse its discretion in giving little weight to Griffin’s arguments that bad faith is demonstrated by TeamCare’s failure to provide her with a usable fee schedule and it is a repeat offender, and that she suffered prejudice because she could not adequately appeal the underpayment and her small medical practice suffered financially while she awaited compliance.

Subrogation/Reimbursement Claims

Seventh Circuit

Cent. States, Se. & Sw. Areas Health & Welfare Fund v. Haynes, No. 19-2589, ___F.3d__, 2020 WL 4047436 (7th Cir. July 20, 2020) (Before Frank H. Easterbrook, Circuit Judge). A fiduciary of a medical benefit plan brought suit against a plan beneficiary to enforce plan terms under ERISA and recover medical expenses it paid on the beneficiary’s behalf after the beneficiary settled a tort suit against a hospital related to the same medical expenses. The United States District Court for the Northern District of Illinois granted the fiduciary’s motion for summary judgment. The beneficiary appealed. The court held that the beneficiary was required to reimburse the plan fiduciary for medical expenses it paid on her behalf because the terms of the plan contained reimbursement provisions. Defendant cannot replace the statutory and plan terms with principles of contract law because there is no ambiguity and neither the plan nor the statute needs supplementation in this case. Having accepted the plan benefits, Defendant must accept the obligations, too.


Third Circuit

Fink on behalf of Nation Safe Drivers Employee Stock Ownership Plan v. Wilmington Tr., N.A., No. CV 19-1193-CFC, __F.Supp.3d__, 2020 WL 4192510 (D. Del. July 21, 2020) (Judge Colm Connolly). In this ERISA pension class action, Defendants filed a motion to transfer venue. Plaintiff filed her lawsuit in Delaware. Plaintiff and the individual defendants reside in Florida. The court considered the twelve interests laid out by the Third Circuit to be considered when deciding whether to grant a motion to transfer venue under 28 U.S.C. §1404(a). Jumara v. State Farm Ins. Co. 55 F.3d 873, 879 (3d Cir. 1995). The court determined that Defendants had failed to prove the Jumara factors weighed strongly in favor of transfer and denied the motion.

Withdrawal Liability & Unpaid Contributions

Second Circuit

Trustees Of The New York City District Council Of Carpenters Pension Fund, Welfare Fund, Annuity Fund, Apprenticeship, Journeyman Retraining, Educational And Industry Fund, et al. v. Duncan Partners, LLC, No. 19-CV-8120 (RA), 2020 WL 4208368 (S.D.N.Y. July 22, 2020) (Judge Ronnie Abrams). The court granted Plaintiffs’ motion for default judgment and awarded $57,884.39 in the principal deficiency, $13,721.79 in interest, $1,147.75 in promotional fund contributions, $40,434.88 in liquidated damages, $3,825 in audit costs, and $575.39 in costs incurred in bringing this action, as well as postjudgment interest. The court also awarded attorneys’ fees at the rate of $225/hour.

Trustees of the Ne. Carpenters Health v. Cold Shield, Inc., No. 19-CV-04673 (FB), 2020 WL 4207440 (E.D.N.Y. July 22, 2020) (Judge Block). The court granted Petitioners’ petition to confirm an arbitration award in full. Respondent must pay $12,520.64, plus prejudgment interest, and $2,315.70 in attorneys’ fees and costs arising from this petition.

New York State Teamsters Conference Pension & Ret. Fund v. E. Reg’l Contracting, Inc., No. 519CV0165GTSCFH, 2020 WL 4047895 (N.D.N.Y. July 20, 2020) (Judge Glenn T. Suddaby). In this action to collect delinquent employee benefit contributions, the court granted Plaintiffs’ motion for default judgment in the amount of $35,834.75, inclusive of attorneys’ fees, plus pre-judgment interest.

Third Circuit

Sheet Metal Workers’ Health & Welfare Fund of Local No. 19, et al. v. Invision Sign LLC, No. CV 20-2291, 2020 WL 4220490 (E.D. Pa. July 23, 2020) (Judge Gerald J. Pappert). Plaintiffs moved for default judgment, seeking $3,932.40 in unpaid contributions, $1,035.99 in interest, $3,453.28 in liquidated damages, $2,820.00 in attorneys’ fees and $535.00 in costs, plus post-judgment interest. The court found that Plaintiffs have shown they are entitled to a default judgment in their favor, but they must substantiate their claim for damages before the court can grant their motion in full.

Seventh Circuit

Midwest Operating Engineers, Pension Tr. Fund v. Americana Landscape Grp., Inc., No. 18-CV-7097, 2020 WL 4052820 (N.D. Ill. July 20, 2020) (Judge Sharon Johnson Coleman). Plaintiffs “allege that Americana Landscape Group breached its contractual obligations when it failed to submit certain remittance reports and contributions and refused to cooperate with a fringe benefit audit.” The court agreed and granted summary judgment to Plaintiffs.

East Central Illinois Pipe Trades Health & Welfare Fund & Plumbers and Steamfitters U.A. Locals 63 v. Prather Plumbing & Heating, Inc., No. 1:18-CV-01434, 2020 WL 4060766 (C.D. Ill. July 20, 2020) (Judge Joe Billy McDade). “This lawsuit is between Plaintiff East Central Illinois Pipe Trades Health & Welfare Fund and Plaintiff Plumbers and Steamfitters U.A. Locals 63;353 Pension Trust Fund and Defendant Prather Plumbing & Heating, Inc. Plaintiffs seek to hold Defendant liable for a 2013 default judgment entered against a different corporation, Prather Plumbing, Inc. (PPI). …. The bottom line is: Defendant made a modest purchase of generic, used tools and equipment previously owned by PPI, the likes of which could have easily been purchased elsewhere. Imposition of liability for a judgment more than nine times the value of the purchases from which the liability flows is immensely inequitable, particularly when Defendant has clearly taken measures to maintain a wholly separate corporate identity from PPI. As the equities weigh against imposing successor liability, the Court’s inquiry need not proceed further; Plaintiffs’ lawsuit cannot succeed.”

Tenth Circuit

Boilermaker-Blacksmith National Pension Trust, et al. v. Becker Boiler Co., Inc., No. 19-02346-EFM, 2020 WL 4200748 (D. Kan. July 22, 2020) (Judge Eric F. Melgren). In this suit, where the Fund seeks to enforce Becker’s obligation to make interim withdrawal liability payments to the Fund while the parties arbitrate Becker’s ultimate liability, the court granted the Fund’s Motion for Judgment on the Pleadings. The court has chosen not to allow exceptions to the plain statutory language requiring employers to “pay now, dispute later.”

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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