Justia U.S. 9th Circuit Court of Appeals Opinion SummariesArticles Posted in ERISA
Western States Office and Professional Employees Pension Fund v. Welfare & Pension Administration Service, Inc.
Under the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. 1001–1461, when an employer withdraws from a multiemployer pension plan, the employer is required to pay for its share of unfunded benefits. Withdrawal liability may be paid in annual installments, calculated in part based on the “highest contribution rate” the employer was required to pay into the plan during a specified time period. When a multiemployer plan is underfunded and in critical status, the employer must pay a surcharge of five or 10 percent of the total amount of contributions the employer was required to make to the plan each year.The district court entered summary judgment in favor of the defendant in an action brought by a multiemployer pension plan, seeking a recalculation of the defendant’s annual withdrawal liability payments. The Ninth Circuit affirmed. For purposes of determining an employer’s annual withdrawal payment, a surcharge paid by the employer when a plan is in critical status is not included in the calculation of the “highest contribution rate.” The surcharge automatically imposed on an employer when a plan is in critical status does not increase the applicable contribution rate, which in this case is the dollar amount per compensable hours. View "Western States Office and Professional Employees Pension Fund v. Welfare & Pension Administration Service, Inc." on Justia Law
Bristol SL Holdings, Inc. v. Cigna Health and Life Insurance Co.
Through a bankruptcy proceeding, Bristol became the successor-in-interest to Haven, an accredited mental-health and substance-abuse treatment center that regularly serviced patients insured by Cigna. Bristol alleged that Cigna violated the Employee Retirement Income Security Act of 1974 (ERISA) and state law by denying Haven’s claims for reimbursement for services provided. Haven was out-of-network for Cigna’s insureds. The district court dismissed Bristol’s ERISA claim, as an assignee of a healthcare provider, for lack of derivative standing, or lack of authority to bring a claim under ERISA, 29 U.S.C. 1132(a)(1)(B).The Ninth Circuit reversed. Under ERISA, a non-participant health provider cannot bring claims for benefits on its own behalf but must do so derivatively, relying on its patients’ assignments of their benefits claims. Other assignees also may have derivative standing if extending standing would align with the goal of ERISA. Refusing to allow derivative standing for Bristol would create serious perverse incentives that would undermine the goal of ERISA. Denying derivative standing to health care providers would harm participants or beneficiaries because it would discourage providers from becoming assignees and possibly from helping beneficiaries who were unable to pay up-front. View "Bristol SL Holdings, Inc. v. Cigna Health and Life Insurance Co." on Justia Law
Warmenhoven v. NetApp, Inc.
Plaintiff and six other retired executives sued NetApp and the Plan, alleging that terminating the Plan violated the Employee Retirement Income Security Act (ERISA) because they had been promised lifetime benefits. The complaint alleged two distinct ERISA claims: (1) a direct claim for benefits under 29 U.S.C. 1132(a)(1)(B); and (2) an alternate claim for equitable relief under section 1132(a)(3) to redress NetApp's alleged misrepresentations that the Plan would provide lifetime benefits. After the district court granted summary judgment in favor of NetApp, only plaintiff appealed.The Ninth Circuit affirmed the district court's judgment as to plaintiff's section 1132(a)(1)(B) claim, rejecting plaintiff's contention that NetApp's promises in the PowerPoints created an ERISA plan with lifetime benefits. Furthermore, by deliberately choosing to stand on his flawed argument that the PowerPoints created a vested ERISA plan without there being any written instrument, and by declining to argue in the alternative that he could prevail even if section 1102(b) applied, plaintiff has affirmatively waived any argument under the proper legal standard that the PowerPoints were written instruments. The panel explained that that waiver conclusively defeats his section 1132(a)(1)(B) claim because, under Cinelli v. Sec. Pac. Corp., 61 F.3d 1437, 1441 (9th Cir. 1995), he bears the burden to prove that a specific written instrument vested lifetime benefits.The panel vacated the judgment as to plaintiff's section 1132(a)(3) claim, disagreeing with the district court's conclusion that no reasonable factfinder could find that NetApp committed a remediable wrong. Rather, the panel concluded that plaintiff's fiduciary duty claim survives summary judgment on the remediable wrong issue, because there is a genuine dispute of material fact as to whether NetApp incorrectly represented to Plan participants that the Plan provided lifetime health insurance benefits. Accordingly, the panel remanded the issue for further proceedings. View "Warmenhoven v. NetApp, Inc." on Justia Law
Wong v. Flynn-Kerper
The Ninth Circuit reversed the district court's dismissal, based on the doctrine of equitable estoppel, of an Employee Retirement Income Security Act (ERISA) action in which the Trustee of the Anaplex Corporation Employee Stock Ownership Plan (ESOP) sought equitable and declaratory relief against the holder of a promissory note from Anaplex.The panel joined the Fourth Circuit in barring the defensive use of equitable estoppel when estopping the plaintiff would contradict an ERISA plan's express terms. The panel deferred to ERISA's focus on what a plan provides, consistent with US Airways, Inc. v. McCutchen, 569 U.S. 88, 100 (2013). The panel explained that equitable estoppel has no place at any stage in this litigation, and the district court erred in dismissing the case based on it.The panel held that, in addition to satisfying the traditional equitable estoppel requirements, a party bringing a federal equitable estoppel claim in the ERISA context must also allege: (1) extraordinary circumstances; (2) that the provisions of the plan at issue were ambiguous such that reasonable persons could disagree as to their meaning or effect; and (3) that the representations made about the plan were an interpretation of the plan, not an amendment or modification of the plan. Furthermore, a party cannot maintain a federal equitable estoppel claim against a trust fund where recovery on the claim would contradict written plan provisions. In this case, allowing the holder to assert her equitable estoppel claim against the trustee would contradict the clear terms of the ESOP. The panel remanded. View "Wong v. Flynn-Kerper" on Justia Law
Howard Jarvis Taxpayers Ass’n v. California Secure Choice Retirement Savings Program
The federal Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. 1001, et seq., does not preempt a California law that creates a state-managed individual retirement account (IRA) program.The Ninth Circuit concluded that CalSavers is not an ERISA plan because it is established and maintained by the State, not employers; it does not require employers to operate their own ERISA plans; and it does not have an impermissible reference to or connection with ERISA. Furthermore, CalSavers does not interfere with ERISA's core purposes. Therefore, ERISA does not preclude California's endeavor to encourage personal retirement savings by requiring employers who do not offer retirement plans to participate in CalSavers. The panel affirmed the district court's judgment. View "Howard Jarvis Taxpayers Ass'n v. California Secure Choice Retirement Savings Program" on Justia Law
Wilson v. Craver
The Ninth Circuit affirmed the district court's dismissal of plaintiff's action against defendants, two Edison Executives, alleging breach of fiduciary duty under the Employee Retirement Income Security Act (ERISA) in managing the plan's assets. Defendants are fiduciaries of Edison's 401(k) employee stock ownership plan (ESOP). Plaintiff claimed that Defendant Fiduciary Boada breached his duty of prudence by allowing employees to continue to invest in Edison stock after he learned that the Edison stock was artificially inflated.The panel concluded that the district court properly determined that plaintiff failed plausibly to plead that a prudent fiduciary in defendants' position could not have concluded that plaintiff's proposed alternative action of issuing a corrective disclosure would do more harm than good. In this case, the second amended complaint relies solely on general economic theories and is devoid of context-specific allegations explaining why an earlier disclosure was so clearly beneficial that a prudent fiduciary could not conclude that disclosure would be more likely to harm the fund than to help it. Accordingly, plaintiff failed to state a claim for breach of the duty of prudence consistent with the standard announced in Fifth Third Bancorp v. Dudenhoeffer, 573 U.S. 409, 428 (2014). Consequently, the derivative monitoring claim alleged against Defendant Craver also fails. View "Wilson v. Craver" on Justia Law
Bafford v. Northrop Grumman Corp.
Plaintiffs filed suit alleging that Hewitt, the Committee, and Northrop had breached their fiduciary duties and that the Committee failed to provide required Employee Retirement Income Security Act (ERISA) benefit information. In the alternative, plaintiffs asserted state-law professional negligence and negligent misrepresentation claims against Hewitt. Plaintiffs' claims stemmed from statements mailed by Hewitt that grossly overestimated the benefits to which each plaintiff would be entitled. The district court granted defendants' motion to dismiss.The Ninth Circuit affirmed the district court's dismissal of plaintiffs' fiduciary duty claims against Northrop and the Committee, concluding that Northrop and the Committee did not breach a fiduciary duty by failing to ensure that Hewitt correctly calculated plaintiffs' benefits. The panel agreed with the First Circuit and held that calculation of pension benefits is a ministerial function that does not have a fiduciary duty attached to it. Likewise, plaintiffs' claim that Hewitt breached its fiduciary duties failed. The panel also concluded that plaintiffs did not adequately plead that they submitted written requests for pension benefit statements as required to state a claim for violation of 29 U.S.C. 1025(a)(1)(B)(ii). However, because plaintiffs could plead facts adequate to allege they made written requests, the panel directed the district court to permit plaintiffs to file an amended complaint. Finally, the panel concluded that state-law professional negligence and negligent misrepresentation claims are not preempted by ERISA because they do not have a "reference to or connection with" an ERISA plan. Accordingly, the panel vacated the dismissal of the state-law claims and remanded for further proceedings. View "Bafford v. Northrop Grumman Corp." on Justia Law
In re Becker
The Ninth Circuit denied a petition for a writ of mandamus challenging the district court's order transferring an action under the Employee Retirement Income Security Act (ERISA) from the Northern District of California to Minnesota federal court pursuant to a forum selection clause in a retirement plan. The panel held that mandamus relief was not warranted because the district court did not clearly err in transferring the case. The panel explained that courts are in near universal agreement: ERISA does not bar forum selection clauses. Therefore, the panel found no reason to disagree with their well-reasoned conclusion. In this case, the plan contained a forum selection clause and the district court properly enforced that clause. View "In re Becker" on Justia Law
Beverly Oaks Physicians Surgical Center, LLC v. Blue Cross and Blue Shield of Illinois
The Ninth Circuit reversed the district court's dismissal of Beverly Oaks' claim for benefits under the Employee Retirement Income Security Act of 1974 (ERISA). Beverly Oaks contends that Blue Cross waived or is equitably estopped from raising an anti-assignment provision as a reason for denying a benefits claim for the first time in litigation.The panel held, under Spinedex Physical Therapy USA Inc. v. United Healthcare of Ariz., Inc., 770 F.3d 1282, 1296 (9th Cir. 2014), that Beverly Oaks plausibly alleged that Blue Cross waived the anti-assignment provisions in the Teamsters, Williams Lea, and Woodward Plans. Therefore, Blue Cross cannot raise the anti-assignment provision for the first time in litigation when Blue Cross held that provision in reserve as a reason to deny benefits. In this case, Blue Cross confirmed that plan benefits were available during pre-surgery conversations, Beverly Oaks submitted the claim form to Blue Cross indicating that it sought to recover benefits via a patient assignment, and Blue Cross either denied in full or underpaid the claims during the administrative claim process without asserting the anti-assignment provision as a ground for denying full reimbursement. The panel also held that Beverly Oaks alleged facts that showed plausibly that Blue Cross made an actionable misrepresentation and was thus equitably estopped from raising the antiassignment provisions as a litigation defense contrary to its prior conduct. View "Beverly Oaks Physicians Surgical Center, LLC v. Blue Cross and Blue Shield of Illinois" on Justia Law
Doe v. CVS Pharmacy, Inc.
Plaintiffs, individuals living with HIV/AIDS who have employer-sponsored health plans, and who rely on those plans to obtain prescription drugs, filed suit alleging that CVS's program violates the anti-discrimination provisions of the Affordable Care Act (ACA), the Americans with Disabilities Act (ADA), and the California Unruh Civil Rights Act (Unruh Act); denies them benefits to which they are entitled under the Employee Retirement Security Act (ERISA); and violates California's Unfair Competition Law (UCL). The district court granted defendants' motion to dismiss.The Ninth Circuit held that Section 1557 of the ACA does not create a healthcare-specific anti-discrimination standard that allowed plaintiffs to choose standards from a menu provided by other anti-discrimination statutes. Because plaintiffs claim discrimination on the basis of their disability, to state a claim for a Section 1557 violation, they must allege facts adequate to state a claim under Section 504 of the Rehabilitation Act. Applying the section 504 framework, the panel concluded that plaintiffs adequately alleged that they were denied meaningful access to their prescription drug benefit under their employer-sponsored health plans because the program prevents them from receiving effective treatment for HIV/AIDS. Therefore, plaintiffs have stated a claim for disability discrimination under the ACA.However, plaintiffs have failed to establish a claim of disability discrimination under the ADA, because they have not plausibly alleged that their benefit plan is a place of public accommodation. Finally, the panel upheld the district court's denial of plaintiffs' claims under ERISA and their cause of action under California's Unfair Competition Law. The panel affirmed in part, vacated in part, and remanded. View "Doe v. CVS Pharmacy, Inc." on Justia Law