Articles Posted in ERISA

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Current and former employees of the University of Southern California may not be compelled to arbitrate their collective claims for breach of fiduciary responsibility against USC in an action under the Employee Retirement Income Security Act (ERISA). The Ninth Circuit affirmed the district court's denial of USC's motion to compel arbitration of claims for breach of fiduciary duty in the administration of two ERISA plans. The panel held that the district court properly denied USC's motion to compel arbitration where the claims asserted on behalf of the Plans in this case fell outside the scope of the arbitration clauses in individual employees' general employment contracts. View "Munro v. University of Southern California" on Justia Law

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A company must assume the unpaid withdrawal liability of its predecessor to a multiemployer pension plan if it was on constructive notice of potential withdrawal liability. The Ninth Circuit reversed the district court's judgment for plaintiffs in an action under the Multiemployer Pension Plan Amendment Act (MPPAA). The panel held that congressional purpose, the liberal remedial construction of the MPPAA adopted in previous cases, the adoption of a constructive notice standard in other contexts, and the practical realities of asset purchases all support a conclusion that constructive notice of withdrawal liability is sufficient to trigger successor withdrawal liability under the MPPAA. Applying a constructive notice standard in this case, the panel held that Amstar had constructive notice because a reasonable purchaser would have discovered Ohana's withdrawal liability. View "Heavenly Hana LLC v. Hotel Union & Hotel Industry of Hawaii Pension Plan" on Justia Law

Posted in: ERISA

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The Ninth Circuit reversed the district court's judgment for MetLife in an Employee Retirement Income Security Act (ERISA) action. MetLife denied coverage because plaintiff's leg injury was complicated by his diabetes. The panel held, however, that plaintiff was entitled to coverage because his diabetes did not substantially cause his leg injury from an automobile accident nor did diabetes contribute to his injury. Accordingly, the panel remanded for further proceedings. View "Dowdy v. Metropolitan Life Insurance Co." on Justia Law

Posted in: ERISA

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The Ninth Circuit affirmed the district court's dismissal of an action under the Employee Retirement Income Security Act (ERISA). In this case, employee benefit trust funds sought unpaid contributions owed under the contracts governing the benefit plans that the trust funds managed for Accuracy Glass & Mirror Company. The panel held that plaintiffs' claims were foreclosed by Bos v. Bd. of Trustees (Bos I), 795 F.3d 1006 (9th Cir. 2015), which held that employers are not fiduciaries under ERISA as to unpaid contributions to ERISA benefit plans. View "Glazing Health & Welfare Fund v. Lamek" on Justia Law

Posted in: ERISA

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A plan administrator is not an Employee Retirement Income Security Act (ERISA) fiduciary when negotiating its compensation with a prospective customer. The Ninth Circuit reversed the district court's order denying defendants' motion to dismiss an action alleging breach of fiduciary duties in connection with a retirement plan. The panel held that defendant was not a fiduciary with respect to its receipt of revenue sharing payments from investment managers because the payments were fully disclosed before the provider agreements were signed and did not come from plan assets. The panel agreed with other circuits and held that defendant also was not a fiduciary with respect to its withdrawal of preset fees from plan funds. The panel explained that when a service provider's definitively calculable and nondiscretionary compensation was clearly set forth in a contract with the fiduciary-employer, collection of fees out of plan funds in strict adherence to that contractual term was not a breach of the provider’s fiduciary duty. The panel vacated class certification orders and remanded with instructions to dismiss the complaint. View "Santomenno v. Transamerica Life Insurance Co." on Justia Law

Posted in: ERISA

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The Ninth Circuit reversed the district court's denial of appellate attorney's fees under the Employee Retirement Income Security Act, 29 U.S.C. 1132(g)(1). The panel held that, pursuant to Sokol v. Bernstein, 812 F.2d 559, 561 (9th Cir. 1987), a court must consider the entire course of the litigation when analyzing a party's request for appellate attorney's fees within the Hummell v. S.E. Rykoff & Co., 634 F.2d 446 (9th Cir. 1980), rubric. Accordingly, the panel remanded to the district court for calculation of a reasonable award of fees and costs. View "Micha v. Sun Life Assurance of Canada" on Justia Law

Posted in: ERISA

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The Ninth Circuit reversed the district court's judgment in favor of MetLife in an action filed by plaintiff to seek life insurance benefits under a benefits plan governed by the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001 et seq. The panel held that MetLife waived the evidence of insurability requirement because it did not ask plaintiff for a statement of health, even as it accepted her premiums for $250,000 in coverage. In this case, MetLife's purported ignorance of the facts did not negate its obligation to pay the entire $250,000 because, under agency law, the policyholder-employer's knowledge and conduct may be attributed to MetLife. View "Salyers v. Metropolitan Life Insurance Co." on Justia Law

Posted in: ERISA

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The Ninth Circuit reversed the district court's grant of summary judgment to defendants in an action under the Employee Retirement Income Security Act (ERISA). Plaintiff alleged that defendants failed to adequately disclose that the lifetime benefit maximum applied to the plan at issue. The panel held that ERISA, as amended by the Affordable Care Act, does not ban lifetime benefit maximums for certain retiree-only plans; defendants violated ERISA's statutory and regulatory disclosure requirements by providing a faulty summary of material modifications describing changes to the lifetime benefit maximum in September 2010; and genuine disputes of material fact preclude summary judgment on the breach of fiduciary duty claims. View "King v. Blue Cross and Blue Shield" on Justia Law

Posted in: ERISA

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After Aetna determined that plaintiff was not disabled and terminated her benefits, she filed suit under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001 et seq. The district court applied de novo review and held that Aetna improperly denied plaintiff's claim. The Ninth Circuit vacated the district court's judgment, holding that the district court should have reviewed the denial only for abuse of discretion. The panel held that the plan contained a discretionary clause and thus called for abuse of discretion review; Aetna provided no sound reason to depart from the text of section 22 of the California Insurance Code, which brought within the scope of Cal. Ins. Code 10110.6 Boeing's self-funded STD plan; ERISA preempted application of section 10110.6 to Boeing's self-funded plan; and remand was necessary to permit the district court to properly apply the abuse of discretion standard. View "Williby v. Aetna Life Insurance Co." on Justia Law

Posted in: ERISA

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The Ninth Circuit vacated the district court's grant of summary judgment in favor of plaintiffs in an Employee Retirement Income Security Act (ERISA) action. The panel held that the plan comprised of two documents: the Trust Agreement and the Summary Plan Description (SPD). The Supreme Court's decision in CIGNA Corp. v. Amara, 563 U.S. 421 (2011), was not to the contrary. An SPD may constitute a formal plan document, consistent with Amara, so long as the SPD neither adds to nor contradicts the terms of existing plan documents. In this case, the SPD was a part of the plan itself, and there was no conflict between the SPD and the Trust Agreement. Therefore, Amara did not prohibit this type of arrangement, and the district court erred in concluding that the SPD was not part of the plan. The panel remanded for further proceedings. View "Mull v. Motion Picture Industry Health Plan" on Justia Law

Posted in: ERISA