Justia U.S. 9th Circuit Court of Appeals Opinion Summaries

Plaintiffs, current and former employees of RingCentral, participated in RingCentral’s employee welfare benefits plan. The plan participated in the “Tech Benefits Program” administered by Sequoia Benefits and Insurance Services, LLC, a management and insurance brokerage company. The Tech Benefits Program was a MEWA that pooled assets from employer-sponsored plans into a trust fund for the purpose of obtaining insurance benefits for employees at large-group rates. Plaintiffs filed this putative class action on behalf of the RingCentral plan and other Tech Benefits Program participants, asserting that Sequoia owed fiduciary duties to the plan under ERISA because Sequoia allegedly exercised control over plan assets through its operation of the Tech Benefits Program. Plaintiffs alleged that Sequoia violated its fiduciary duties by receiving and retaining commission payments from insurers, which Plaintiffs regarded as kickbacks, and by negotiating allegedly excessive administrative fees with insurers, leading to higher commissions for Sequoia.   The Ninth Circuit affirmed the district court’s dismissal for lack of Article III standing. The court held that Plaintiffs failed to establish Article III standing as to either of their two theories of injury. The panel held, as to the out-of-pocket-injury theory, Plaintiffs failed to establish the injury in fact required for Article III standing because their allegations did not demonstrate that they paid higher contributions because of Sequoia’s allegedly wrongful conduct. And Plaintiffs failed to plead the third element, that their injury would likely be redressed by judicial relief. View "RACHAEL WINSOR, ET AL V. SEQUOIA BENEFITS & INSURANCE, ET AL" on Justia Law

Plaintiffs submitted health plan coverage requests, which United Behavioral Health (“UBH”) denied. Plaintiffs brought claims under ERISA for breach of fiduciary duty and improper denial of benefits. The parties stipulated to a sample class, from which they submitted a sample of health insurance plans. Plaintiffs alleged that the plans provided coverage for treatment consistent with generally accepted standards of case (“GASC”) or were governed by state laws specifying certain criteria for making coverage or medical necessity determinations. Plaintiffs alleged that UBH’s Level of Care Guidelines and Coverage Determination Guidelines for making these determinations were more restrictive than GASC and were also more restrictive than state-mandated criteria. The district court certified three classes, conducted a bench trial, and entered judgment in Plaintiffs’ favor. The district court issued declaratory and injunctive relief, directed the implementation of court-determined claims processing guidelines, ordered “reprocessing” of all class members’ claims in accordance with the new guidelines, and appointed a special master to oversee compliance for ten years.   The Ninth Circuit affirmed in part and reversed in part. The panel held that Plaintiffs had Article III standing to bring their breach of fiduciary duty and improper denial of benefits claims. And the district court did not err in certifying three classes to pursue the fiduciary duty claim. However, because Plaintiffs expressly declined to make any showing, or seek a determination of, their entitlement to benefits, permitting Plaintiffs to proceed with their denial of benefits claim under the guise of a “reprocessing” remedy on a class-wide basis violated the Rules Enabling Act. View "DAVID WIT, ET AL V. UNITED BEHAVIORAL HEALTH" on Justia Law

Plaintiff challenged Lincoln’s denial of her claim for long-term disability benefits. On de novo review, the district court affirmed Lincoln’s denial of Plaintiff's claim, but it adopted new rationales that the ERISA plan administrator did not rely on during the administrative process. Specifically, the district court found for the first time that Plaintiff was not credible and that she had failed to supply objective evidence to support her claim.The Ninth Circuit held that when a district court reviews de novo a plan administrator’s denial of benefits, it examines the administrative record without deference to the administrator’s conclusions to determine whether the administrator erred in denying benefits. The district court’s task is to determine whether the plan administrator’s decision is supported by the record, not to engage in a new determination of whether the claimant is disabled. Accordingly, the district court must examine only the rationales the plan administrator relied on in denying benefits and cannot adopt new rationales that the claimant had no opportunity to respond to during the administrative process.Here, the district court erred because it relied on new rationales to affirm the denial of benefits. View "VICKI COLLIER V. LINCOLN LIFE ASSURANCE COMPANY" on Justia Law

Plaintiff's son died in a single-vehicle collision. At the time, he was intoxicated and driving the wrong way on a one-way road. The accidental death and dismemberment insurance policy obtained from defendant Life Insurance Company of North America (LINA) by the plaintiff via his employer paid benefits for a “Covered Accident,” defined as “[a] sudden, unforeseeable, external event that results, directly and independently of all other causes.”Applying the Padfield test, Padfield v. AIG Life Ins. Co., 290 F.3d 1121 (9th Cir. 2002), the son’s death was an “accident” because, while the facts demonstrated that the son engaged in reckless conduct, the record did not show that his death was “substantially certain” to result from that conduct. Thus, the Ninth Circuit affirmed the district court's finding. View "SCOTT WOLF V. INS. CO. OF N. AMERICA" on Justia Law

Plaintiffs brought this action against the Motion Picture Industry Health Plan (the “Plan”) and the Plan’s Board of Directors under Section 502(a)(1)(B) and § 502(a)(3) of the Employee Retirement Income Security Act of 1974 (“ERISA”). Plaintiff is a participant in the Plan. The remaining co-Plaintiffs are covered dependents of Norman.   Plaintiff was a participant in the Plan. After his daughter, a covered dependent, was injured in a car accident, the Plan paid benefits to cover a portion of her medical expenses. Under the Plan’s terms, Plaintiff was liable to the Plan for the reimbursement of these benefits if the daughter recovered the money from the third party who caused her injuries. Although the daughter obtained such a recovery, she dissipated her settlement funds without reimbursing the Plan, and Plaintiff did not pay the reimbursement amount himself.   The Ninth Circuit reversed the district court’s summary judgment in favor of Plaintiffs in an action against the Motion Picture Industry Health Plan and the Plan’s Board of Directors, alleging violation of the Employee Retirement Income Security Act of 1974, and remanded with instructions for the district court to enter summary judgment in favor of the Plan.   Reversing, the court concluded that contractual defenses could not defeat the clear and unambiguous terms setting forth the Plan’s self-help remedy. Assuming without deciding that plaintiffs could invoke the equitable doctrines of illegality, impossibility of performance, and unconscionability, the panel concluded that these defenses could not override the terms of the Plan under the facts in this case. View "LENAI MULL V. MOTION PICTURE INDUSTRY HEALTH" on Justia Law

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

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

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

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

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