In Central States, Southeast & Southwest Areas Health & Welfare Fund v. Gerber Life Ins. Co., 771 F.3d 150 (2d Cir 2014), the Second Circuit joined the Fifth Circuit in ruling that an ERISA health plan generally has no equitable remedy against another insurer in a coordination of benefits dispute.
Continue Reading Coordination-of-Benefits Claim Is Not Equitable

In 2011, the Supreme Court issued a major ERISA decision, Cigna Corp. v. Amara, 131 S.Ct. 1866 (2011), holding that courts could not reform an ERISA plan as part of a claim for benefits under 29 U.S.C. 1132(a)(1)(B), but could do so as an equitable remedy under 29 U.S.C. 1132(a)(3). The case involved a situation in which the district court had ruled that Cigna had misrepresented the terms of a new pension plan when asking employees with vested rights in an outgoing plan to accept transfer. The district court had reformed the plan under 1132(a)(1)(B) to provide the benefits Cigna had promised; the Supreme Court held that the district court had used the wrong section of ERISA as the basis for its ruling.The Supreme Court then remanded for further consideration under the rules and limitations it had announced.

Amara v. CIGNA Corp., 775 F.3d 510, 513 (2d Cir. 2014), presumably is the final decision in this long-running dispute.
Continue Reading Second Circuit Affirms Reformation Judgment in Amara v. Cigna; Reformation Governed by Contract Rules, Not Trust Rules

In 2013, the 6th Circuit made waves in the ERISA world when it held that LINA could be ordered to disgorge almost $3 million in profits it allegedly made on benefits it had improperly withheld, on top of payment of the benefits themselves. A few months later, the court granted LINA’s petition for en banc review, and vacated the 2013 decision .

Last week a divided 6th Circuit vacated the disgorgement of profits in a ruling that restores sanity to ERISA benefits litigation.
Continue Reading Rochow Part 3: En Banc Panel Vacates Disgorgement Award

In Santomenno ex rel. John Hancock Trust v. John Hancock Life Ins. Co. (U.S.A), — F.3d –, 2014 WL 4783665 (3d Cir. Sept. 26, 2014), the plaintiffs, who were participants in employer-sponsored 401(k) benefit plans, claimed that John Hancock, an administrator that provided investment services to plans, breached its fiduciary duty by allegedly charging the retirement plans excessive fees.
Continue Reading Court Requires Nexus Between Alleged Fiduciary Duty and Alleged Damage

In Bd. of Trustees of the Nat. Elevator Indus. Health Benefit Plan v. McLaughlin,  — F.3d –, 2014 WL 4852096 (3d Cir. Oct. 1, 2014), plaintiff argued that his medical plan could not enforce an equitable lien by agreement to recover medical expenses paid because the New Jersey Collateral Source Statute (the “NJCSS”) precluded

In Gabriel v. Alaska Electrical Pension Fund, 755 F.3d 647 (9th Cir. 2014), a venal claimant met a not-very competent plan administrator, and the result was a helpful discussion of limits on make-whole equitable claims. [Note, on December 16, 2014, the Ninth Circuit panel withdrew this opinion, and replaced it with a new one, at 773 F.3d 945]
Continue Reading Ninth Circuit Discusses Limits On Make-Whole Equitable Remedies for Breach of Fiduciary Duty

Providing for “coordination of benefits” means including a provision in an insurance policy that address what should happen if more than one insurer covers the same claim. Virtually every primary insurance policy will say that, if other insurance exists, the other policy will pay first. Of course, when there are two policies providing coverage, each one typically says the other pays first. Coordination-of-benefits disputes involving deciding whether the provisions conflict, and, if so, how to resolve the conflict. Ordinarily, when policies have conflicting coordination-of-benefits provisions, courts rule that the provisions cancel each other out, and both policies share liability pro rata.
Continue Reading Fifth and Sixth Circuits Consider Coordination-of-Benefits Remedies For ERISA Plans

I imagine that, for a federal judge, getting reversed is not pleasant, even though it’s part of the job. Well, pity poor Judge Larimer of the Western District of New York, who has now been reversed three times in the same case – twice by the Second Circuit and once by the Supreme Court.
Continue Reading Frommert v. Conkright: The Saga Continues, or “Strike Two for Xerox”

The Sixth Circuit has just taken an “unprecedented and extraordinary step to expand the scope of ERISA coverage” (in the words of the dissent) by affirming a judgment directing a disability insurer to pay about $900,000 in improperly denied benefits plus disgorge an additional $3,800,000, representing profits it allegedly made on the benefits. I agree with the dissent; this represents a significant expansion of potential liability for ERISA fiduciaries in the Sixth Circuit.
Continue Reading Disgorgement of $3,800,000 ordered for failure to pay $900,000 in disability benefits

At the District Court, Heimeshoff also argued that the limitation period in the plan should be equitably tolled because, she claimed the applicable ERISA regulation required Hartford to disclose the limitation period in its denial letter, and it failed to do so. Hartford argued that it was irrelevant whether the regulation required disclosure because Heimeshoff and her attorney knew what the plan said, and their knowledge precluded them from seeking equitable tolling. Hartford also argued that the regulation did not require disclosure.
Continue Reading Hartford v. Heimeshoff – ERISA Regulations and Equitable Tolling