Sixth Circuit Clarifies, Declines to Overrule Yard-Man “Inference” that Retiree Health Benefits Negotiated under a Collective Bargaining Agreement Are Vested.

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Before concluding that the district court had not abused its discretion under the specific facts and evidence presented, the Sixth Circuit clarified the appropriate inquiry as follows: The defendants “devote a great deal of energy to disputing the correctness of the Yard-Man inference. El Paso even suggests that this panel should overrule Yard-Man. These concerns are significantly overstated. El Paso …

Tenth Circuit joins Third, Eighth and Ninth Circuits that authority or control over plan assets does not have to be “discretionary”.

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On May 19, 2005, the U.S. Court of Appeals for the Tenth Circuit held that accountants who received plan contributions, deposited them into their business account, and then wrote checks for the amount of the contribution on behalf of the plan were fiduciaries. Rejecting the argument that these responsibilities were “ministerial”, the court re-affirmed the distinction in the ERISA statute …

The Sixth Circuit finds that breach of fiduciary duty claims for improper processing emergency-medical-treatment claims are excused from the exhaustion requirement under the futility exception.

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“Although it is well settled that ERISA plan beneficiaries must exhaust administrative remedies prior to bringing a suit for recovery on an individual claim, we have not yet decided whether a beneficiary must exhaust administrative remedies prior to bringing claims based on statutory rights, such as Sections 1104 and 1105 fiduciary-duty claims. Instead, we have resolved such cases on the grounds …

Third Circuit rejects Milofsky and concludes that participants in 401(k) plan who suffered losses may bring suit under Section 502(a)(2).

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Participants in the Schering-Plough Corporation 401(k) Plan brought suit against fiduciaries on behalf of the Savings Plan and all participants whose accounts included investments in Schering stock, (alleging that the defendants breached their fiduciary duties of loyalty, prudence and due care by continuing to offer the Company Stock Fund when they knew that Schering’s stock price was artificially inflated). The …

District Court allows suit for breach of fiduciary duty brought by plan participant against plan’s PBM to proceed.

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Robert Moeckel, a participant in the John Morrell & Co. Employee Benefit Plan, brought suit for breach of fiduciary duty against Caremark, the plan’s Pharmacy Benefits Manager (“PBM”). The suit seeks statutory relief on behalf of the Plan, pursuant to Section 502(a)(2), as well as injunctive and equitable relief for the Plan and its participants who paid percentage co-payments, pursuant …

Equitable set-off of attorneys fees against pension benefits of participant asserting unsuccessful claim under ERISA Section 502(a)(1).

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Plaintiff brought a claim for an increase in his disability benefits. The claim was denied, and attorneys fees were assessed against the plaintiff. In addition, the court granted an equitable set-off against future benefits to ensure payment of the attorneys’ fees. The Third Circuit reversed. “While it may be argued that plan participants, like Martorana, who bring suits which are …

The Ninth Circuit holds that failure to comply with the time limitations imposed by 29 C.F.R. 2560.503-1(h) does not require de novo review; technical violations of the Act do not alter the standard of review unless they result in substantive harm.

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In 2002, (opinion withdrawn and superceded in 2003), the Ninth Circuit, in Jebian v. Hewlett-Packard, held that the plan administrator’s failure to decide an appeal within 120 days justified de novo review – where the Plan provides for the 120-day period found in the regulations. On May 31, 2005, the Court refused to apply the holding where the participant or beneficiary relies …