Articles Posted in ERISA

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Life Insurance Company of North America’s terminated plaintiff-appellant Carl Van Steen’s long-term disability benefits under Lockheed Martin’s ERISA Plan. Life Insurance Company of North America (LINA) appealed the district court’s finding that its decision to terminate Van Steen’s benefits was arbitrary and capricious. Van Steen, in turn, appealed the district court’s denial of his attorney’s fees request. Van Steen was physically assaulted during an altercation while walking his dog. The assault resulted in a mild traumatic brain injury (mTBI) that impacted Van Steen’s cognitive abilities that prevented him from returning to full time work; Van Steen was eventually allowed to return to part-time work on a daily basis roughly six weeks later. Even on a part-time schedule, Van Steen experienced cognitive fatigue and headaches that required him to frequently rest. Due to his inability to stay organized and keep track of deadlines after the assault, Van Steen received poor feedback on his job performance. Van Steen’s claim for partial long-term disability benefits was approved on March 30, 2012. Roughly a year later, LINA reviewed Van Steen’s file, contacted his doctors, and confirmed that Van Steen’s condition and restrictions were permanent as he was “not likely to improve.” Despite this prognosis, LINA sent Van Steen a letter one week later terminating his long-term disability benefits, explaining that “the medical documentation on file does not continue to support the current restrictions and limitations to preclude you from resuming a full-time work schedule.” Having exhausted his administrative appeals under the Plan, Van Steen next sought relief before the district court. The district court reversed LINA’s decision to terminate Van Steen’s partial long-term disability benefits on the grounds that it was arbitrary and capricious, but denied Van Steen’s request for attorney’s fees. The Tenth Circuit agreed with the district court’s reversal of LINA’s decision to terminate Van Steen’s coverage. The Court also found that Van Steen was not eligible for attorney fees: “Van Steen’s arguments fail to convince us that the district court’s decision was based on a clear error of judgment or exceeded the bounds of permissible choice.” View "Van Steen v. Life Insurance Company N.A." on Justia Law

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The Employee Retirement Income Security Act of 1974 (ERISA), generally exempts from its requirements “church plans”: employee-benefit plans established and maintained by churches for their employees. ERISA also extends that church-plan exemption to "principal-purpose" organizations. Catholic Health Initiatives (CHI), a nonprofit organization created to carry out the Roman Catholic Church’s healing ministry, operates 92 hospitals and numerous other healthcare facilities in 18 states. CHI offers a retirement plan for its employees, with more than 90,000 participants and beneficiaries, and nearly $3 billion in plan assets. Janeen Medina, a CHI employee, filed a class action, alleging that CHI’s retirement plan failed to satisfy the statutory criteria for the church-plan exemption. She contended that, since the plan did not qualify for the exemption, CHI should have complied with the reporting and funding requirements of ERISA. Medina also argued the individual defendants who administered the plan breached their fiduciary duties by failing to comply with ERISA. And, Medina argued, even if the CHI plan did qualify as a church plan, the exemption violated the Establishment Clause of the United States Constitution. The district court held that CHI’s plan was a church plan that qualified for the ERISA exemption. On appeal, the Tenth Circuit agreed, concluding that CHI’s plan satisfied the statutory requirements for the church-plan exemption as a proper principal-purpose organization. The ERISA exemption, moreover, does not run afoul of the United States Constitution’s Establishment Clause. View "Medina v. Catholic Health Initiatives" on Justia Law

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The Pioneer Centres Holding Company Employee Stock Ownership Plan and Trust and its trustees sued Alerus Financial, N.A. for breach of fiduciary duty in connection with the failure of a proposed employee stock purchase. The district court granted summary judgment to Alerus after determining the evidence of causation did not rise above speculation. The Plan appealed, claiming the district court erred in placing the burden to prove causation on the Plan rather than shifting the burden to Alerus to disprove causation once the Plan made out its prima facie case. In the alternative, the Plan argued that even if the district court correctly assigned the burden of proof, the Plan established, or at the very least raised a genuine issue of material fact regarding, causation. Finding no reversible error, the Tenth Circuit affirmed the district court. View "Pioneer Centres Holding Co v. Alerus Financial, N.A." on Justia Law

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Steven Williams alleged that his former employer, FedEx Corporate Services, violated the Americans with Disabilities Act (ADA) by discriminating against him based on his actual and perceived disabilities, and by requiring his enrollment in the company’s substance abuse and drug testing program. Williams further alleges that Aetna Life Insurance Company, the administrator of FedEx’s short-term disability plan, breached its fiduciary duty under the Employee Retirement Income and Security Act (ERISA) when it reported to FedEx that Williams filed a disability claim for substance abuse. Both FedEx and Aetna filed motions for summary judgment, which the district court granted. After review, the Tenth Circuit affirmed in part, and reversed and remanded. An employer is liable for an improper medical examination or inquiry, “unless such examination or inquiry is shown to be job-related and consistent with business necessity.” FedEx argued that it satisfied the business necessity exception because its employee testing program “ensure[] that employees who seek assistance for drug abuse or dependencies are no longer abusing the drug if they return to FedEx.” The Tenth Circuit found that the district court did not address this argument. As a result, the Court did not have an adequate record from which it could decide this issue on appeal. The Court reversed for the district court to decide that issue, and affirmed in all other respects. View "Williams v. FedEx Corporate" on Justia Law

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The issue this case presented for the Tenth Circuit's review involved claims under the Employee Retirement Income Security Act of 1974 (ERISA). Trent Lebahn and his wife claimed that a pension-plan consultant breached a fiduciary duty by misstating the amount of the monthly pension payments that Mr. Lebahn would receive if he were to retire. The Tenth Circuit found that under ERISA, the plan consultant could be considered a fiduciary only if she exercised discretionary authority over the plan’s administration. The Tenth Circuit addressed whether a consultant exercises discretionary authority in administering the plan simply by making a calculation of benefits at the request of a plan participant Finding that a consultant does not exercise discretionary authority under these circumstances, the Tenth Circuit affirmed judgment in favor of the pension plan and its consultant. View "Lebahn v. National Farmers Union" on Justia Law

Posted in: ERISA

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Trent Lebahn sued Eloise Owens, a consultant for Lebahn’s employee pension plan, for negligently misrepresenting the amount of his monthly retirement benefits. The district court dismissed Lebahn’s negligent-misrepresentation claim, concluding it was preempted by the Employee Retirement Income Security Act. Lebahn then filed an untimely Rule 59 motion, arguing preemption did not apply because Owens was not a fiduciary of the pension plan. The district court construed the untimely motion as one under Rule 60(b) and denied relief, reasoning that Lebahn’s argument regarding Owens’s fiduciary status had been raised too late. Lebahn appealed. The Tenth Circuit concluded it lacked jurisdiction to consider Lebahn’s challenge to the district court’s underlying judgment, so its review was limited to the district court’s denial of relief under Rule 60(b). Upon review, the Court found Lebahn did not demonstrate the district court abused its discretion in denying relief under Rule 60(b), and therefore the district court’s judgment was affirmed. View "Lebahn v. Owens" on Justia Law

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Joseph Martinez was a participant in the Plumbers and Pipefitters National Pension Plan, (governed by the Employee Retirement Income Security Act (ERISA)). Following some health problems, Martinez retired from plumbing in 2004 at age 56 and took advantage of the Plan’s early retirement pension. After a few years in retirement, he felt well enough to resume working, and his pension was suspended during that time according to rules that prohibit retirement benefits during disqualifying employment. When he retired again in 2009, he asked the National Pension Fund to allow him to convert the pension benefits he previously elected from an early retirement pension to a disability pension (a change that would have entitled him to higher monthly payments). The Fund denied the conversion and the district court upheld the denial. After review, the Tenth Circuit agreed with the district court that the Plan language was unambiguous and allowed Plan participants to apply for and receive only one type of pension benefit for life absent several clearly delineated exceptions, none of which applied to Martinez. Accordingly, the Court affirmed the Fund’s denial of Martinez’s claim for disability benefits. View "Martinez v. Plumbers & Pipefitters" on Justia Law

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Plaintiffs-appellants represent a class of retirees formerly employed by Sprint-Nextel Corporation, Embarq Corporation (or a predecessor and/or subsidiary company of either Embarq or Sprint). Plaintiffs sued after Defendants altered or eliminated health and life insurance benefits for retirees. Plaintiffs asserted Defendants: (1) violated the Employee Retirement Income Security Act of 1974 (ERISA) by breaching their contractual obligation to provide vested health and life insurance benefits; (2) breached their fiduciary duty by, inter alia, misrepresenting the terms of multiple welfare benefit plans; and (3) violated the Age Discrimination in Employment Act (ADEA) and applicable state laws by reducing or eliminating the same benefits. Defendants moved for summary judgment on the breach of fiduciary duty claims, the ADEA claims, the state-law age discrimination claims, and some of the contractual vesting claims. The district court granted Defendants’ motions in part and Plaintiffs obtained a Rule 54(b) certification. The Tenth Circuit concluded Defendants did not contractually agree to provide Plaintiffs with lifetime health or life insurance benefits and thus affirmed in part the grant of summary judgment as to the contractual vesting claims. To the extent the district court granted summary judgment against class members whose contractual vesting claims arise, in whole or in part, from summary plan descriptions (other than those identified in Defendants’ motion), the Court reversed the grant of summary judgment against those class members. The Court reversed the district court’s dismissal of Plaintiffs’ breach of fiduciary duty claims brought pursuant to 29 U.S.C. 1132(a)(3) and reversed the dismissal of Plaintiffs’ remaining breach of fiduciary duty claims to the extent those claims were premised on a fraud theory. Finally, because Defendants’ decision to reduce or terminate the group life insurance benefit was based on a reasonable factor other than age, their actions did not violate the ADEA, and the Tenth Circuit affirmed the grant of summary judgment in favor of Defendants on those claims. View "Fulghum v. Embarq Corporation" on Justia Law

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Plaintiff Lucrecia Carpio Holmes appealed a district court’s ruling that her claim for disability benefits under the Employee Retirement Income Security Act (ERISA) was barred due to her failure to exhaust administrative remedies. Finding no reversible error, the Tenth Circuit affirmed. View "Holmes v. Colorado Coalition" on Justia Law

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Dr. Charles Dahl and Ms. Kim Dahl divorced in 2010. Ms. Dahl filed suit in the United States District Court for the District of Utah, alleging federal-law and state-law claims stemming from the terms of the divorce: (1) that Dr. Dahl improperly administered the pension trust of his medical practice to deny her funds and an accounting and (2) that her telephone conversations with the Dahls’ minor children were unlawfully monitored, recorded, and disclosed by Dr. Dahl, his attorney, and the children’s guardian ad litem (GAL) in the divorce proceedings. The district court dismissed the federal-law pension claims for lack of subject-matter jurisdiction and granted summary judgment against Ms. Dahl on the federal-law wiretapping claims. It then declined to exercise jurisdiction on the state-law claims. Ms. Dahl appealed. Upon review, the Tenth Circuit: affirmed the district court’s dismissal of Ms. Dahl’s pension claims on the ground that the pension trust did not qualify as an employee benefit plan under ERISA, but that the claim should have been on the merits rather than for lack of jurisdiction. The Court affirmed the district court in all other respects. View "Dahl v. Dahl, et al" on Justia Law