Third Circuit Reverses Denial of Long-Term Disability Benefits as Arbitrary and Capricious in the Absence of Specific Findings by the Administrator.

In What's New in ERISA Litigation?, What's New in the Courts by gravierhouseLeave a Comment

In a claim for LTD benefits against an insurance company, the court reversed the denial of benefits as “arbitrary and capricious” where specific findings were lacking as to the essential question of disability. The court found that: “The irreducible logical core of such a finding, [i.e., that the plaintiff was capable of performing alternate occupations], is that a claimant has …

Courts in the Second Circuit Reaffirm the Test for Fiduciary Status as a Bi-Furcated Test; Status Can Be Predicated on Either the Granting or the Exercise of Discretionary Authority.

In What's New in ERISA Litigation?, What's New in the Courts by gravierhouseLeave a Comment

Both the Second Circuit and a District Court sitting in the Northern District of New York recently rejected the argument that parties who were vested with discretionary authority, but did not actually exercise such authority, were not ERISA fiduciaries. The defendants attempted to argue that the Second Circuit’s decision in Blatt v. Marshall rendered formal designations of trusteeship irrelevant. Blatt …

Divided Tenth Circuit Panel Concludes that Third-Party’s Benefits Determination is Entitled to Deference.

In What's New in ERISA Litigation?, What's New in the Courts by gravierhouseLeave a Comment

Plaintiffs were beneficiaries of the United Staffing Medical Plan. The relevant plan documents contained the Firestone language, naming United Staffing as the Plan Administrator and Named Fiduicary, but identifying an independent third party, Everest Administrator, as responsible for the review of claims. Both United and Everest were sued for denial of benefits and breach of fiduciary duty. Applying a de …

Supreme Court Effectively Overrules Great-West.

In What's New in ERISA Litigation?, What's New in the Courts by gravierhouseLeave a Comment

Without formally overruling the Great-West v. Knudson decision, the U.S. Supreme Court held that a plan fiduciary could seek subrogation under Section 502(a)(3). Relying on a 1914 decision, the court found that the claim was “equitable” because “the ‘Acts of Third Parties’ provision in the Sereboffs’ plan specifically identified a particular fund, distinct from the Sereboffs’ general assets – ‘all …

Fourth Circuit Rejects Breach of Fiduciary Duty Claim For Mismanagement of 401(k) Plan.

In What's New in ERISA Litigation?, What's New in the Courts by gravierhouseLeave a Comment

The plaintiff, James LaRue, was a participant in a 401(k) plan, and alleges that, in 2001 and 2002, he directed DeWolff to make certain changes to the investments in his plan account, but that these directions were never carried out. Rejecting his 502(a)(2) claims, the U.S. Fourth Circuit Court of Appeals found it difficult to characterize the remedy as anything …

Supreme Court Holds That Claims for Payment of Workers’ Compensation Premiums Do Not Receive Priority Under the U.S. Bankruptcy Code.

In What's New in ERISA Litigation?, What's New in the Courts by gravierhouseLeave a Comment

Concluding that workers compensation premiums do not constitute unpaid contributions to an “employee benefit plan” under Section 507(a)(5) of the Bankruptcy Code, the Court rejected an argument that the definition of “welfare benefit plan” should be borrowed from the general definition used in ERISA. Noting that ERISA specifically exempts application to workers’ compensation plans, the Court based its decision on …

Second Circuit Requires SPD to Provide Sufficient Notice to Participants with respect to their Burden to Establish a Claim for Additional Benefits under the Plan.

In What's New in ERISA Litigation?, What's New in the Courts by gravierhouseLeave a Comment

A worker claimed that, because his employer under-reported his earnings to his pension fund, he did not get the pension benefits to which he was entitled. Initially, the U.S. Second Circuit Court of Appeals confirmed that Central States does not specifically require continuing audits of the employer, so long as some affirmative attempt (in this case a series of random …

Sixth Circuit Affirms Fiduciary Status with Respect to Control Over Plan Assets, Even in the Absence of “Discretionary Authority”.

In What's New in ERISA Litigation?, What's New in the Courts by gravierhouseLeave a Comment

Like most Circuits who have addressed the issue, the Sixth Circuit recently affirmed that a person who controls plan assets acquires fiduciary responsibility irrespective of whether that control is discretionary. The defendant, PHP, “still controlled plan assets after the formal conclusion of its relationship with the Company and with the plan participants. Documents in the record demonstrate that PHP terminated …

Third Circuit Clarifies “Date of Last Action” under Unisys and the “Fraud or Concealment” Discovery Rule.

In What's New in ERISA Litigation?, What's New in the Courts by gravierhouseLeave a Comment

Plaintiffs are former employees of Kodak’s Eastman Pharmaceutical Division and were participants in the Kodak Retirement Income Plan. In 1988, Kodak began to merge the Division with Sterling, which was acquired by Sanofi in 1994. As an incentive to change employment, human resources personnel allegedly advised plaintiffs that they would retain Kodak benefits moving from Kodak to Sterling, and that …

The D.C. Circuit Agrees with Most Other Circuits that Discretion is Not a Prerequisite to Fiduciary Status where the Alleged Fiduciary Exercises Control Over Plan Assets.

In What's New in ERISA Litigation?, What's New in the Courts by gravierhouseLeave a Comment

The Secretary of Labor filed suit against an agent who accepted hundreds of thousands of dollars from twenty-nine ERISA-covered employee benefit plans for the purchase of insurance for the plans. “Under his brokerage scheme, Day sent invoices to the plans for various insurance policies, the plans paid the bills by sending checks to Day, and Day deposited the checks into …