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Your ERISA Watch – Tenth Circuit Holds that Cryotherapy Technician Is a “Sales” Employee under Group Long Term Disability Policy

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This week’s notable decision is Hodges v. Life Ins. Co. of N. Am., No. 18-1279, __F.3d__, 2019 WL 1446800 (10th Cir. Apr. 2, 2019), a matter involving the proper calculation of long term disability benefits based on the classification of the plaintiff’s job.

The facts:  Hodges worked as a cryotherapy technician for Endo Pharmaceuticals before he was forced to stop working due to a degenerative eye condition.  As an employee of Endo, Hodges was a participant in its group insurance plan insured by Life Insurance Company of North America (“LINA”).  Hodges’s disability is not in dispute.  In dispute is whether Hodges, as a cryotherapy technician who “sold products out in the field” and was responsible for assisting in the “growth and development of existing and new business lines” should be deemed Class 2 “Sales Personnel” under the Policy.  Sales Personnel or Sales is not defined in the Policy.  Hodges’s disability benefits would be higher under the Class 2 formula since it factored in payments received from bonuses or target incentive compensation bonuses and 30% of his income came from sales-driven compensation.  Hodges submitted emails and documents showing how the company stressed the importance of cryotherapy technicians to market the company’s products.  However, Endo informed LINA that it did not classify Hodges as “sales” and that he was paid a bonus for additional tests he performed at doctors’ offices. Additionally, these bonuses were not included in the LTD premium calculation. LINA determined that Hodges was not a Class 2 employee based mostly on Endo’s representations.

The Holdings:  The court first considered whether LINA is entitled to deference in deciding who qualifies as a salesperson under the Policy.  The court found that the Policy contained no language granting LINA the discretion to determine who qualifies as a salesperson.  The Policy only states that LINA “determines” eligibility.  If LINA wanted to reserve itself discretion, then it should have done so explicitly.  It has had 30 years since Firestone to get it right.

On whether Hodges qualifies as a salesperson, the court found that he does.  Hodges had responsibilities to sell and promote Endo’s commercial products and had to submit a minimum of one lead a month for new cryotherapy users.  He received a significant portion from bonuses when he did sell products and services.  Endo’s three Incentive Compensation Plans also provided bonuses to employees like Hodges who recruited new physicians to use Endo’s methods.  The court found that Hodges’s job clearly involved selling Endo’s products.  Even though he derived most of his income from non-sales activities, he could not continue cryotherapy without selling the company’s products.  The court agreed with the district court that a reasonable person in his position would have believed himself to be a salesperson.

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

Attorneys’ Fees

Second Circuit

Levy v. Young Adult Institute, Inc., et al., No. 13-CV-2861 (JPO), 2019 WL 1434271 (S.D.N.Y. Mar. 30, 2019) (Judge J. Paul Oetken).  In this suit seeking to recover benefits under a supplemental executive retirement plan, the court awarded Plaintiffs a total of $2,170,778.14 in attorney’s fees and costs (60% of amount requested) with leave to file a supplemental motion for attorney’s fees with respect to fees and expenses incurred from September 1, 2017 to the present.  The court made the following notable determinations: (1) fees for work done pre-filing are authorized when reasonably incurred in connection with the commencement of the action; (2) semi-clerical work such as the organizing of countless numbers of documents in a complicated case or other work that requires a comprehensive understanding of, and familiarity with, the substance of the case may be recoverable; (3) the attorneys’ submitted evidence that they charge clients interest on past-due payments, thus, the 4% prime rate in effect when final judgment was entered is appropriate to add to the fee award; (4) Plaintiffs are not entitled to expert fees incurred by experts who did not testify and are limited to reimbursement for expert fees to the per diem allowances provided for by 28 U.S.C. § 1821; (5) Plaintiffs are entitled to costs of travel, copying, shipping, and meals since these costs are reasonable costs customarily charged to clients but they are not entitled to costs for expenses with no supporting documentation; (6) the $107,794.56 in fees and costs arising from Plaintiffs’ counsel’s work in connection with the fee motion is excessive and subject to reduction; (7) where Plaintiffs did not prevail on approximately three-quarters of their claims and prevailed on only half the claims that proceeded to discovery, the court found that a reduction of fees of 35% is warranted given the incomplete success.

Sixth Circuit

Guest-Marcotte v. Life Ins. Co. of N. Am., No. 18-1948, __F.App’x__, 2019 WL 1470910 (6th Cir. Apr. 1, 2019) (BEFORE: NORRIS, ROGERS, and THAPAR, Circuit Judges).  Last year, the Sixth Circuit reversed the district court, finding that LINA’s denial of Plaintiff’s long term disability claim was arbitrary and capricious.  Guest-Marcotte v. Life Ins. Co. of N. Am., 730 F. App’x 292 (6th Cir. 2018).  The district court then denied Plaintiff attorneys’ fees because it found that there was not a “high degree of culpability” and this impacted its assessment of the rest of the King factors.  The Sixth Circuit disagreed.  “The facts of this case represent a paradigm case for when attorneys’ fees are called for under 29 U.S.C. § 1132(g). This is not a case in which we determined on balance that the plan’s decision was marginally arbitrary or capricious. Instead LINA denied benefits based on repeated and material misreading of the plan requirements. . . In this case LINA’s error regarding the plan terms affected each of the legally relevant factors that the district court applied to its attorneys’ fee decision, such that the overall denial could be upheld only by applying an unduly strict standard for granting fees. This then is one of the rare instances under § 1132(g) when a district court’s denial of fees under this statute must be reversed.”

Breach of Fiduciary Duty

Fifth Circuit

Blackwell, et al v. Bankers Trust Company of South Dakota, No. 3:18-CV-141-CWR-FKB, 2019 WL 1433769 (S.D. Miss. Mar. 29, 2019) (Judge Carlton W. Reeves).  The court denied Defendant’s motion to dismiss Plaintiff’s claim under Section 406(a)(1) that Defendant’s authorization of the ESOP’s purchase of Sta-Home stock from parties in interest above fair market value was prohibited by ERISA because Plaintiff sufficiently alleged how Defendant’s conduct in this transaction was inadequate.  There is no support for Defendant’s position that Plaintiff must preemptively address an affirmative defense.  The court also denied dismissal of the Section 406(b) claim that Defendant received consideration for its own personal account from Sta-Home because Plaintiffs sufficiently alleged the incentives Defendant had for brokering the deal and a plausible conflict in Defendant’s representation.

Sixth Circuit

Duggan v. Towne Properties Grp. Health Plan, No. 1:15-CV-623, 2019 WL 1439936 (S.D. Ohio Mar. 31, 2019) (Judge Michael R. Barrett).  Plaintiff sought reconsideration of the court’s class certification decision on the basis that it committed a clear error of law in its finding that MedBen’s nonfiduciary status precluded class certification of an ERISA § 502(a)(3) claim.  The court denied Plaintiff’s motion because it seeks to re-argue the motion on alternative arguments that could have been brought in the original motion.  But, the court found that Plaintiff’s new theory would fail to establish that Plaintiff can bring class claims against MedBen because as a nonfiduciary, Plaintiff has no claim for relief against it under § 502(a)(3).

Seventh Circuit

McMaken v. Greatbanc Trust Company, No. 17-CV-04983, 2019 WL 1468157 (N.D. Ill. Apr. 3, 2019) (Judge Andrea R. Wood).  In this lawsuit alleging that Defendants caused the ESOP to engage in a prohibited transaction, the court granted Plaintiff’s motion to amend the complaint to add additional claims.  It found that Plaintiff’s ERISA § 404 claim based on the indemnification provision in the engagement agreement is not futile.  “While it is true that a fiduciary may by indemnified by a plan sponsor in the same manner as insurance, ERISA prohibits any agreement that relieves the fiduciary of responsibility or liability for violating ERISA—specifically, liability resulting from a breach of fiduciary duty.”  The court also determined that Plaintiff’s “allegations of the ties between GreatBanc’s valuation of the Plan’s assets and its own compensation is sufficient to state a prohibited transaction claim under ERISA § 406(b)(1).”  Lastly, the court found that Plaintiff pleaded enough facts to support a breach of fiduciary duty claim.

Ninth Circuit

Cromwell v. Kaiser Found. Health Plan, No. 18-CV-06187-EMC, 2019 WL 1493337 (N.D. Cal. Apr. 4, 2019) (Judge Edward M. Chen).  Plaintiff alleged that Kaiser’s changing the terms of the health plan to not cover speech therapy for autism on the same terms as it provided Applied Behavioral Analysis therapy and in-patient treatment violates the California Mental Health Parity Act and is a breach of fiduciary duty for which she seeks equitable relief of plan reformation and disgorgement. The court granted Kaiser’s motion to dismiss Plaintiff’s breach of fiduciary duty claim under Section 502(a)(3) because it found that Kaiser did not act as a fiduciary in amending the plan.  The court also dismissed Plaintiff’s Section 502(a)(2) claim seeking disgorgement of the money Kaiser received in excess of the $20 copayment it previously required for speech therapy because Section 502(a)(2) does not provide a remedy for injuries suffered by individual participants as a result of a breach of fiduciary duty.  Even if the Section 502(a)(2) claim could be sustained because the refusal to pay benefits was part of a larger systematic breach of fiduciary obligations, the appropriate relief for the plan would be removal of the fiduciary, not disgorgement of the beneficiaries’ payments, which would likely come from plan assets.

Class Actions

Second Circuit

Hoeffner v. D’Amato, No. 09CV3160PKCCLP, 2019 WL 1428367 (E.D.N.Y. Mar. 29, 2019) (Judge Pamela K. Chen).  In this class action brought by four asphalt plant workers against the Trustees of the Local 1175 Funds to force the transfer of certain assets to the Local 175 Funds, the court partially granted “Named Plaintiffs’ motion for class certification, certifying the pension subclass as defined by the parties on consent, but certifying a modified version of the welfare subclass proposed by Defendants.”

Pension Subclass—All persons who were (i) employees of the employers College Point, Grace Industries and/or Willets Point, (ii) vested participants in the Local 1175 Pension Fund, and (iii) whose nonforfeitable benefits were transferred to the Local 175 Pension Fund in December 2013.

Welfare Subclass—All employees of employers College Point Asphalt Corporation, Willets Point Contracting Corporation, and Grace Industries, LLC who were participants in the Local 1175 Welfare Fund and who became participants eligible for benefits from the Local 175 Welfare Fund as a result of a certified change in collective bargaining representative in 2005, excluding all persons who received retiree-related benefits from the Local 1175 Welfare Fund.

Fourth Circuit

Peters v. Aetna Inc., No. 1:15-CV-00109-MR, 2019 WL 1429607 (W.D.N.C. Mar. 29, 2019) (Judge Martin Reidinger).  In this action alleging RICO and ERISA violations for Aetna’s alleged fraudulent scheme with subcontractors causing insureds to pay for the subcontractors’ administrative fees misrepresented as fees for medical expenses, the court denied Plaintiffs’ motion for class certification of the “Plan Claim Class” and the “Member Claim Class.”  The court concluded that Plaintiff has not offered a reliable and administratively feasible mechanism for determining which plans and participants fall within the proposed class definitions and that Plaintiff’s flawed methodology for determining class membership also reflects a lack of commonality among the putative class members.

D.C. Circuit

White, et al. v. Hilton Hotels Retirement Plan, et al., No. CV 16-856 (CKK), 2019 WL 1440223 (D.D.C. Mar. 31, 2019) (Judge Colleen Kollar-Kotelly).  The court denied Plaintiffs’ Motion for Leave to Amend Complaint to Add Additional Named Representative.  “[Kifafi v. Hilton Hotels Retirement Plan, No. 98–cv–1517 (CKK) (D.D.C.)] never made a determination as to a “non-participating service” subclass as Plaintiffs define it; therefore, there are no rights to be vindicated as to any such subclass pursuant to Kifafi. In light of the delay and prejudice that their actions in this litigation already have entailed, Plaintiffs are prohibited from seeking further leave to amend their Second Amended Complaint, unless Plaintiffs decide to forego this claim in this lawsuit.”

Disability Benefit Claims

Fifth Circuit

Foster v. Principal Life Ins. Co., No. 17-30997, __F.3d__, 2019 WL 1474315 (5th Cir. Apr. 4, 2019) (Before SMITH, DUNCAN, and ENGELHARDT, Circuit Judges).  Assuming without deciding that an ERISA plan administrator abuses its discretion by denying benefits under an “Own Occupation” clause based on reports couched only in terms of a claimant’s ability to work at “a full-time sedentary position,” the court found that Principal did not abuse its discretion in denying Plaintiff’s disability benefits where there is substantial evidence showing at least one evaluating physician considered Plaintiff’s disability in light of the specific duties required by her occupation as an attorney.  Though the existence of Plaintiff’s disability based on migraines may be difficult or impossible to demonstrate with “objective evidence,” Principal could require objective evidence of Plaintiff’s inability to work as a result of migraines.  The court gave Principal’s conflict of interest little weight considering its extensive investigation of Plaintiff’s claim.

Seventh Circuit

Allen v. The Lilly Extended Disability Plan, No. 116CV02224TWPTAB, 2019 WL 1429256 (S.D. Ind. Mar. 29, 2019) (Judge Tanya Walton Pratt).  The court determined that the Benefits Committee did not abuse its discretion when it decided to terminate Allen’s long term disability benefits.  The court addressed Plaintiff’s four main arguments for how the Benefits Committee violated the terms of the Plan.  First, the Benefits Committee was not required to conduct a physical examination of Plaintiff over an independent review of her medical records.  Second, Defendants were not required to prove that Plaintiffs’ condition improved before it could terminate benefits that it previously approved; “improvement is a factor for the provider of benefits to consider but not a hurdle it must overcome.”  Third, Defendants were entitled to give more significant weight to more recent evidence and discount an SSA award from nearly a decade ago.  Lastly, any post hoc rationale offered by the Benefits Committee does not entitle Plaintiff to summary judgment given the evidence in the record supporting the termination of benefits and the arbitrary and capricious standard of review.

Eighth Circuit

Roebuck v. USAble Life, No. 4:18-CV-00092 KGB, 2019 WL 1449617 (E.D. Ark. Mar. 30, 2019) (Judge Kristine G. Baker).  The court determined that Defendant did not abuse its discretion when it denied Plaintiff’s disability benefits under the policy.  The three-and-a-half-hour functional capacity examination that Plaintiff underwent shows that she can tolerate the Sedentary level of work for a 40-hour week.  The conflict of interest was reduced close to or to the vanishing point as there was nothing in the record that Defendant’s evaluators were compensated based upon the outcome of their evaluations.

Tenth Circuit

Hodges v. Life Ins. Co. of N. Am., No. 18-1279, __F.3d__, 2019 WL 1446800 (10th Cir. Apr. 2, 2019) (Before MATHESON, PHILLIPS, and EID, Circuit Judges).  See Notable Decision summary above.

Williamson v. Aetna Life Insurance Company, No. 217CV02653RFBCWH, 2019 WL 1446957 (D. Nev. Mar. 31, 2019) (Judge Richard F. Boulware, II).  The court found that Defendant abused its discretion when it terminated Plaintiff’s disability benefits absent medical evidence that her cervical and lumbar fusion or degenerative spinal stenosis improved since Aetna’s award of long term disability benefits in 2014.  The court found that it was unreasonable for Aetna to rely upon Plaintiff’s Facebook and dating website postings as a basis for termination of benefits compared to the use of medical records.  The court also found that eleven minutes of video from a three-day surveillance effort which only showed Plaintiff getting groceries is entirely consistent with Plaintiff’s continued disability.  “The abuse of discretion standard, while highly deferential, must still have some teeth; otherwise, review by this Court is meaningless. A reversal of a medically supported previous award of benefits for no identifiable reason constitutes the definition of arbitrariness and hence an abuse of discretion.”

Discovery

Second Circuit

Metzgar v. U.A. Plumbers and Steamfitters Local No. 22 Pension Fund, et al., No. 13-CV-85V(F), 2019 WL 1466969 (W.D.N.Y. Apr. 3, 2019) (Magistrate Judge Leslie G. Foschio).  The court granted Plaintiffs’ attorneys’ fees in the amount of $2,526 in connection with the motion to compel they brought to obtain documents relevant to their anti-cutback and breach of fiduciary duty claims.  The court disallowed much of the submitted time as not being related to the actual motion to compel.

Cates v. Trustees of Columbia Univ. in City of New York, No. 116CV06524GBDSDA, __F.R.D.__, 2019 WL 1433709 (S.D.N.Y. Apr. 1, 2019) (Magistrate Judge Stewart D. Aaron).  In this suit alleging that the Trustees breached their fiduciary duty by allowing under-performing investments to remain in the retirement plans, the court “held that disclosure of amount of damages sought by participants, as well as categories of damages, in their initial disclosure and supplemental initial disclosure, and alerting trustees of their intent to provide expert disclosures and expert testimony regarding damages, was sufficient to meet their damages disclosure obligations.”

Tenth Circuit

Ramos, et al., v. Banner Health, et al., No. 15-CV-2556-WJM-NRN, 2019 WL 1429283, (D. Colo. Mar. 29, 2019) (Judge William J. Martinez).  In this dispute alleging mismanagement of a 401(k) plan, the court found that Defendants’ expert, Thomas R. Kmak, failed to disclose facts and data underlying his opinions.  The court reopened expert discovery to allow Plaintiffs to depose him for an additional four hours.  The court also ordered the Banner Defendants to disclose supplemental rebuttal expert disclosures from Kmak and to produce certain documents relied on by Kmak.

ERISA Preemption

Ninth Circuit

Howard Jarvis Taxpayers Association v. The California Secure Choice Retirement Savings Program, No. 218CV01584MCEKJN, 2019 WL 1430113 (E.D. Cal. Mar. 29, 2019) (Judge Morrison C. England, Jr.).  Plaintiffs allege that the California Secure Choice Retirement Savings Program, a state-mandated auto-enrollment retirement savings program, is preempted by ERISA.  The court found that Howard Jarvis Taxpayers Association does not have associational standing but that it does have standing as an “Eligible employer” under the Program.  The court found this matter is ripe for adjudication because although enrollments have not yet occurred, the Program was enacted in 2012 and is “implemented” as of 2017.  Additionally, the mandatory auto-enrollment feature is already established.  The court determined that the Program is not entitled to the Safe Harbor exemption but it does not matter since the Program does not create an “employee benefit plan,” and is not preempted by ERISA.  Defendants’ Motion to Dismiss granted.

Eleventh Circuit

Brand v. Church, et al., No. 6:19-CV-00054-LSC, 2019 WL 1452891 (N.D. Ala. Apr. 2, 2019) (Judge L. Scott Coogler). Plaintiff brought several state law claims against her former employers for not using her withheld wages to pay her insurance premiums and converting her deductions for their own purposes.  Plaintiff also alleged that the insurance company, Alliance, acted in bad faith when it refused to pay her claim for the chemotherapy treatments and that it failed to warn her that the insurance premiums were not being paid.  The court found Plaintiff’s claims preempted by ERISA because the insurance plan was established by her employer and she has standing to sue under ERISA Section 502(a) because she was a plan participant when her insurance allegedly lapsed.  The court also found that no independent legal duty supports her claims.  All of the claims require the court to review the plan terms.  The court denied Plaintiff’s motion to remand to state court and permitted Plaintiff to recharacterize her breach-of-contract claim as a claim for benefits under ERISA and dismissed all other claims.

Medical Benefit Claims

Ninth Circuit

Kenneth P., et al. v. Blue Shield of California, No. 18-CV-03550-JSW, 2019 WL 1439094 (N.D. Cal. Apr. 1, 2019) (Judge Jeffrey S. White).  In this dispute over the payment of services for residential treatment, the court concluded that “Plaintiffs have satisfied, albeit barely, Twombly’s pleading standards and have sufficiently alleged facts to support their second claim for relief” under 29 U.S.C. section 1132(a)(3) based on alleged violations of the Mental Health Parity and Addictions Equity Act of 2008.  The court denied Defendant’s motion to dismiss.

Pension Benefit Claims

Second Circuit

Cohen v. Liberty Mut. Grp. Inc., No. 16-CV-9295 (VSB), 2019 WL 1437615 (S.D.N.Y. Mar. 31, 2019) (Judge Vernon S. Broderick).  In this case Plaintiff, a former Liberty Mutual executive, voluntarily resigned and began working for a competitor, Aspen Insurance Services.  He was entitled to receive benefits under the Liberty Mutual Group Inc. Executive Partnership Deferred Compensation Plan (“EPDCP”) and Liberty Mutual Group Inc. 2012 Executive Partnership Plan (“EPP”) based on his 16 years of service.  After he left Liberty Mutual for Aspen, as did many others in his wake, Defendants reclassified his voluntary resignation to a termination for cause, which caused him to forfeit all vested and unvested units in the Plan, totaling $1.27 million in retirement benefits.  The court found that de novo review would typically be appropriate in this case because the Plans did not comply with the ERISA notice requirements when it denied Plaintiff’s claim, including not identifying any Plan provision or including information about the review procedures or time limits.  However, out of caution, the court applied the arbitrary-and-capricious standard of review and found that the Plans’ denial cannot withstand scrutiny under any applicable standard of review.  The court determined that Plaintiff is entitled to benefits because the “For-Cause Sections” contemplate a circumstance in which a plan participant’s employment is terminated for cause by Liberty Mutual and it is undisputed that Liberty Mutual did not terminate his employment.  The act of departing a company cannot alone constitute “cause.”  The court found that remand to Defendants would be a useless formality and ordered Defendants to grant Plaintiff’s claim for benefits.

Metzgar v. U.A. Plumbers & Steamfitters Local No. 22 Pension Fund, No. 13-CV-85V(F), 2019 WL 1428083 (W.D.N.Y. Mar. 28, 2019) (Magistrate Judge Leslie G. Foschio).  Defendants’ suspension of Plaintiffs’ Early Retirement Pensions unless Plaintiffs terminate further employment with Plaintiffs’ employers does not violate ERISA’s anti-cutback rule because Defendants’ determination is not an amendment to the Plan subject to review under § 204(g).  Defendants’ administrative action resulting in the suspension of Plaintiffs’ pensions and loss of employment income was not a de facto plan amendment actionable under § 204(g).  Plaintiffs’ special early retirement pensions were not an accrued benefit under the Plan because they were improperly approved based on Defendants’ misunderstanding of § 401(a)’s requirement.  “Defendants’ suspension of Plaintiffs’ pensions or requiring Plaintiffs forgo continued employment with Plaintiffs’ former employers was not arbitrary, capricious or illegal. To the contrary, it was on based on a reasonable interpretation of applicable Treasury regulations, I.R.S. rulings and the PLR required to preserve the Fund’s tax-exemption.”  Defendants did not breach their fiduciary duty to Plaintiffs by acting in compliance with their obligation under the Trust and applicable tax law.  The breach of fiduciary duty claim is also subject to dismissal due to redundancy.  The court also denied Plaintiffs’ motion for leave to file a supplemental complaint and for preliminary injunction.

Third Circuit

In re: Exide Techs., Reorganized Debtor., No. 13-11482 (KJC), 2019 WL 1422817 (Bankr. D. Del. Mar. 28, 2019) (Judge Kevin J. Carey).  The court sustained the Omnibus Objection to a retiree’s claim for pension benefits.  The court found that the Reorganized Debtor’s evidence is sufficient to overcome the prima facie validity of Mr. Jones’ claim for an unreduced early retirement benefit given the terms of the Pension Plan, modified by the Closing Agreement entered into by the company and the union.

D.C. Circuit

Anthony v. International Association of Machinists and Aerospace Workers District Lodge 1, et al., No. CV 17-1249 (ABJ), 2019 WL 1427244 (D.D.C. Mar. 29, 2019) (Judge ).  The court granted the Fund’s motion for summary judgment because the Fund’s decision finding that Plaintiff was ineligible to participate in the Fund was reasonable and entitled to deference.  The court found that it was reasonable for the Appeals Committee to examine extrinsic evidence to determine the meaning of the Participant Agreement.  It was reasonable to conclude that District Lodge 1 did not intend to make contributions on behalf of Organizers.  The court also determined that Plaintiff cannot pursue duplicative remedies under § 1132(a)(3).

Pleading Issues & Procedure

Second Circuit

Labul v. XPO Logistics, Inc., No. 3:18-CV-2062 (VLB), 2019 WL 1450271 (D. Conn. Apr. 2, 2019) (Judge Vanessa L. Bryant).  In this action alleging violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, the court rejected Local 464A argument that the Pension Funds cannot serve as lead plaintiff because they are trusts which lack standing. The court determined that the Pension Funds are multiemployer pension plans covered by ERISA and therefore have been granted the “status of entities capable of bringing suit in any context in which the district court’s exercise of subject matter jurisdiction is otherwise appropriate.”  And, this court has subject matter jurisdiction over this action pursuant to 28 U.S.C. § 1331 and Section 27 of the Exchange Act, 15 U.S.C. § 78aa.

Ferguson v. Ruane Cuniff & Goldfarb Inc., et al., No. 17-CV-06685 (ALC), 2019 WL 1434435 (S.D.N.Y. Mar. 29, 2019) (Judge Andrew L. Carter, Jr.).  In this putative class action alleging breach of fiduciary duty and other ERISA violations, the court denied Ostrander’s Motion to Intervene.  The court found that it was untimely since it was filed nine months after having both constructive and actual notice of her interests.  “Courts have found shorter delays untimely.”  The court also found that permitting intervention will cause prejudice to existing parties who are in settlement discussions and have held numerous mediation sessions.  Ostrander’s interests are adequately represented by Plaintiffs, so she has failed to prove her right to intervene under Rule 24(a).  The court also denied permissive intervention under Rule 24(b).

Ninth Circuit

Culver v. NXP USA Inc. Long Term Disability Ins. Plan, No. CV-18-02205-PHX-DWL, 2019 WL 1452992 (D. Ariz. Apr. 2, 2019) (Judge Dominic W. Lanza).  The court denied Motion to Seal Plaintiff’s Motion to Supplement the Administrative Record and Its Respective Exhibits, which include 344 pages of records.  The court explained that Plaintiff does not meet the “compelling reasons” standard.  “The annoyance and expense of taking time to redact personal information from documents ordinarily cannot outweigh the public’s interest in access.”  Though Plaintiff has a privacy interest in his medical records, he placed his medical condition at issue by filing this ERISA action.

Multidistrict Litigation

In re Needham Excavating, Inc., Employment Ret. Income Sec. Act (Erisa) Litig., No. MDL 2883, __F.Supp.3d__, 2019 WL 1467975 (U.S. Jud. Pan. Mult. Lit. Apr. 2, 2019) (Before Sarah S. Vance, Chair, Lewis A. Kaplan, Ellen Segal Huvelle, R. David Proctor, Catherine D. Perry, Karen K. Caldwell, Nathaniel M. Gorton Judges of the Panel).  The court denied Needham Excavating, Inc.’s motion under 28 U.S.C. § 1407 to centralize pretrial proceedings in this litigation, consisting of two actions, in the Southern District of Iowa. The panel concluded that centralization is not necessary for the convenience of the parties and witnesses or to further the just and efficient conduct of this litigation.

Retaliation Claims

Seventh Circuit

Washington v. Hughes Socol Piers Resnick, No. 18 C 05162, 2019 WL 1426286 (N.D. Ill. Mar. 29, 2019) (Judge Edmond E. Chang).  Plaintiff alleges that the defendant law firm she hired to represent her in termination proceedings against the Chicago Public Schools Board worked with the Board to force her out of her position to avoid paying employee benefits in violation of ERISA Section 510.  The court granted the law firm’s motion to dismiss the ERISA claim.  “[E]ven if a law firm that has helped an employer force out the firm’s client to prevent the exercise of ERISA-protected rights could theoretically be liable under § 510, Washington has not stated a plausible claim against Hughes Socol.”  The law firm is not Plaintiff’s former employer and there are no allegations about the law firm’s motive or relationship to the Board or the law firm’s knowledge of and involvement in the Board’s allegedly discriminatory plan.

Severance Benefit Claims

Eleventh Circuit

Boysen v. Illinois Tool Works Inc. Separation Pay Plan, No. 17-13145, 2019 WL 1489078 (11th Cir. Apr. 3, 2019) (Before TJOFLAT and JORDAN, Circuit Judges, and HUCK,* District Judge).  In this dispute over separation pay benefits, the Eleventh Circuit reversed the district court, finding that the plan administrator did not give Plaintiff a full and fair review of his claim.  The Plan alleged that Plaintiff was terminated for unsatisfactory job performance, whereas Plaintiff alleged that he was terminated due to a permanent job elimination.  The record shows that the plan administrator repeatedly refused to consider highly relevant evidence or evidence which contradicted his decision.  “This is not a typical benefits case in which the claimant has the necessary medical or personal records in his possession and simply fails to provide them. Here the plan administrator was in a much better position to identify and review internal information about any restructuring at ITW. It is antithetical to the plan administrator’s fiduciary duty to refuse to seek documents that would be in the exclusive control of the company and then blame Mr. Boysen for not producing sufficient evidence. . . We do not hold that plan administrators are obliged to search for and consider every document ‘submitted by identification.’ We rule only that plan administrators, constrained as they are by certain fiduciary obligations, cannot refuse to consider key relevant information, or to investigate further when faced with potentially conflicting evidence, or deny access to information that is potentially beneficial to a claimant.”

State Bans on Discretion

Eighth Circuit

Roebuck v. USAble Life, No. 4:18-CV-00092 KGB, 2019 WL 1449617 (E.D. Ark. Mar. 30, 2019) (Judge Kristine G. Baker).  The court found that de novo review does not apply because the disability policy was issued and renewed prior to March 1, 2013, and was not renewed again after that date.  Thus, Ark. Admin. Code 054.00.101-7 (“Rule 101”), which prohibits discretionary clauses, does not apply.  The court disagreed with Plaintiff that the anniversary date of a policy is not a “renewal” of that policy under Rule 101.

Subrogation/Reimbursement Claims

Second Circuit

Metzgar v. U.A. Plumbers & Steamfitters Local No. 22 Pension Fund, No. 13-CV-85V(F), 2019 WL 1428083 (W.D.N.Y. Mar. 28, 2019) (Magistrate Judge Leslie G. Foschio).  Plaintiffs requested that Defendants’ counterclaims “seeking recoupment of the approximately $1.9 million erroneously paid to Plaintiffs from 2002 to the current date as improperly approved Special Early Retirement pensions be withdrawn for failure to designate a fund exclusively holding such payments in order to support equitable relief available under ERISA as required by Great-West Life & Annuity Ins. Co. v. Knudson, 534 U.S. 204, 213-14 (2002).”  Defendants requested permission to withdraw the Counterclaims since they are unable to establish the existence of the pension funds paid to Plaintiffs to support enforcement of the equitable lien or constructive trust.  Considering Defendants’ request under Rule 41(a)(2), the court found that Defendants’ motion to dismiss the Counterclaims should be granted with prejudice.

Venue

Fourth Circuit

Int’l Masonry Training & Educ. Found. v. Hawaii Masons’ Training Fund, No. 8:18-CV-03320-PX, 2019 WL 1492684 (D. Md. Apr. 3, 2019) (Judge Paula Xinis).  In this suit alleging violations of ERISA as well as Hawaii common law claims of conversion, breach of fiduciary duty, tortious interference with contractual relations, and unjust enrichment, the court granted Defendants’ motion to transfer venue to Hawaii.  Hawaii is a proper venue because that’s where the ERISA case could have been brought, Defendants may be found there, and the alleged breaches occurred in Hawaii.  “Even giving Plaintiffs’ chosen forum due weight, the Court recognizes that the witnesses and evidence concerning this case are located in Hawaii and the law pertinent to the state claims is Hawaiian law. Granting transfer will relieve witnesses of the heavy burden to engage in cross-continental travel and would place the case before a court better situated to interpret Hawaiian law.”

Withdrawal Liability & Unpaid Contributions

First Circuit

Groden v. N&D Transportation Co., Inc., No. CV 14-11028-RWZ, 2019 WL 1434967 (D. Mass. Mar. 29, 2019) (Judge Rya W. Zobel).  The Fund seeks to recover from Defendant a $1.5 million default judgment for withdrawal liability entered against D&N that it has been unable to recover.  “Because there are multiple open questions of material fact relating to the relationship and operation of D&N and N&D at the time D&N went out of business, plaintiff’s motion for summary judgment (Docket #131) is denied.”

Second Circuit

Lajeunesse v. Northern Instrumentation, Inc., No. 118CV590FJSCFH, 2019 WL 1454951 (N.D.N.Y. Apr. 2, 2019) (Judge Frederick J. Scullin, Jr.).  The court granted Plaintiffs’ motion for entry of a default judgment against Defendant and “awarded judgment against Defendant for the sum of $44,877.96, which includes $26,670.40 in unpaid ERISA contributions, $2,251.20 in unpaid Working Dues and Joint Apprenticeship and Training Fund contributions, $15, 516.36 in interest, and $440.00 in costs, with interest continuing thereon to the date of entry of judgment; and, thereafter, interest thereon from the date of entry of judgment to the date of payment at the rate provided for by 28 U.S.C. § 1961(a).”

Fourth Circuit

Trustees of Nat’l Automatic Sprinkler Indus. Welfare Fund v. 715 Fire Prot., LLC, No. CV PX-18-2359, 2019 WL 1492806 (D. Md. Apr. 4, 2019) (Judge Paula Xinis).  The court granted Plaintiffs’ Motion for Default Judgment in the amount of $176,003.11 against Defendants “for unpaid contributions, unpaid amounts under the settlement agreement, liquidated damages, interest, and attorneys’ fees and costs, plus additional contributions, liquidated damages, costs, interest, and reasonable attorneys’ fees that became due from the date this action was filed and through the date of judgment. Additionally, post-judgment interest, calculated in accordance with 28 U.S.C. § 1961, shall continue to accrue until the judgment is satisfied.”

Sixth Circuit

City of Riverview v. Operating Engineers Local 324 Pension Fund, No. 18-11370, 2019 WL 1437266 (E.D. Mich. Mar. 31, 2019) (Judge Denise Page Hood).  “The Court grants the Fund’s Motion to Dismiss on Fed. R. Civ. P. 12(b)(1) grounds because the Sixth Circuit’s three-factor ripeness analysis weighs in its favor.”  “Plaintiff’s claims are not preempted by ERISA because the City’s claims are based on an interpretation of Michigan law.”

Operating Engineers’ Local 324 Fringe Benefit Funds, et al. v. J. C. Holly Contracting, Inc., et al., No. 17-11681, 2019 WL 1429320 (E.D. Mich. Mar. 29, 2019) (Judge Mark A. Goldsmith).  “[T]he Court grants in part and denies in part the Funds motion for summary judgment (Dkt. 23) as follows: The motion is granted as to the liability of Timothy Thayer and Brian Thayer in the amount of $36,166.89 in unpaid fringe benefit contributions owing under the audits. The motion is denied without prejudice as to the Funds’ claim for interest. The Funds can file a new motion on or before April 12, 2019 setting forth a calculation of interest with any supporting documentation. The motion is denied with prejudice as to the Funds’ claim for liquidated damages.”

Seventh Circuit

States v. F.C.J. Properties, Inc., No. 17-CV-5320, 2019 WL 1425444 (N.D. Ill. Mar. 29, 2019) (Judge John J. Tharp, Jr.).  In this dispute where the Fund alleges that Defendant transferred real property to Total Waste Management, LLC in order to evade payment of a debt it owed to the Fund in violation of ERISA, the court denied the Fund’s motion for summary judgment with respect to its ERISA claim and granted it with respect to its state law claim under § 566.35(1) of the Michigan Uniform Fraudulent Transfer Act.  The court entered judgment against Total Waste Management in the amount of $167,152.00.

Eighth Circuit

Manderson v. Elliott Contracting Corp., No. CV 18-2563 (DWF/TNL), 2019 WL 1435931 (D. Minn. Apr. 1, 2019) (Judge Donovan W. Frank).  The court granted Plaintiffs’ Motion for Entry of Default Judgment.  The court ordered “[t]hat judgment in the amount of $49,603.42 shall be entered against Defendant and in favor of Plaintiffs Trustees of the IBEW Local No. 292 Health Care Plan, the Electrical Workers Local No. 292 Pension Fund, the Electrical Workers Local No. 292 Defined Contribution Plan, the Electrical Workers Local No. 292 Vacation & Holiday Fund, the Electrical Workers Local No. 292 Supplemental Unemployment Plan and the Minneapolis Electrical Industry Board/JATC/LMCC for fringe benefit contributions, liquidated damages, interest, and reasonable attorney fees and costs.”

D.C. Circuit

Service Employees International Union National Industry Pension Fund, et al. v. Castle Hill Healthcare Providers, LLC, No. CV 17-1666 (RDM), 2019 WL 1429536 (D.D.C. Mar. 30, 2019) (Judge Randolph D. Moss).  The court granted the Fund’s motion for summary judgment in part and denied it in part without prejudice.

Service Employees International Union National Industry Pension Fund, et al. v. LTP Generations, LLC, et al., No. 17-CV-0942 (KBJ), 2019 WL 1423686 (D.D.C. Mar. 29, 2019) (Judge Ketanji Brown Jackson).  “SEIU’s motion for default judgment will be GRANTED IN PART, and SEIU will be awarded: (1) $416,616.29 in unpaid contributions, interest, liquidated damages, and testing fees, and (2) $6,550.50 in attorney’s fees and costs. In addition, the Court will grant the requested injunctive relief and order Defendants to: (1) submit the outstanding remittance reports for the period from January 2014 through April 2017; and (2) remit any additional outstanding contributions that are found as a result of these reports, consistent with the analysis set forth in the R&R.”

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