In Hawkins v. Cintas Corp., No. 21-3156, __ F.4th __, 2022 WL 1236954 (6th Cir. Apr. 27, 2022), the U.S. Court of Appeals for the Sixth Circuit ruled that an arbitration clause contained in certain individual employment agreements may be insufficient to compel arbitration of putative class action claims asserted under ERISA § 502(a)(2).
In Ruderman v. Liberty Mut. Grp., Inc., No. 21-817, 2022 WL 244086 (2d Cir. Jan. 27, 2022), the U.S. Court of Appeals for the Second Circuit ruled that reclassification of a claimant’s disability from one that is physically-based to one that is psychiatrically-based does not constitute an “adverse benefit determination” within the meaning of…
Plaintiffs seeking recovery of group disability benefits under ERISA-governed plans routinely argue that claim fiduciaries failed to adequately consider and/or account for decisions by the Social Security Administration (SSA) to award Social Security Disability Insurance (SSDI) benefits. As a result, federal courts are regularly tasked with evaluating the substance and sufficiency of discussions of SSDI awards (that are made a part of the administrative record) in adverse benefit determination letters.
Continue Reading Third Circuit Clarifies Sufficiency Of Discussions Of Social Security Disability Insurance Awards In Adverse Disability Benefit Determinations Under Pre-2018 ERISA Claims Procedure Regulation
In 2010, Chief Justice John Roberts observed that that ERISA is “an enormously complex and detailed statute.” Conkright v. Frommert, 559 U.S. 506, 509 (2010).
Some things don’t change. A recent decision out of the District Court of New Jersey exemplifies how even the most seemingly mundane procedural act — removal — implicates legal nuances with which courts continue to grapple.
Continue Reading D.N.J. Rejects Plaintiff’s Fee Request In Connection With State Court Remand Of Action Removed Under ERISA, Scaling Back Earlier Charge That Defendant’s Removal Was Nonsensical
Those involved in disability claims administration may wish to consider the potential impacts of the current global pandemic. In the current crisis, disability claims regulations may not be at the top of many peoples’ minds. However, insurers, plan administrators, and other involved in disability claims administration may wish to reevaluate the applicable Department of Labor deadlines and requirements in light of present pressures on medical personnel, persons with serious health problems, and business disruptions.
Continue Reading Disability Claims Regulations and the COVID-19 Pandemic
The Ninth Circuit recently issued two decisions in Dorman v. Charles Schwab Corp.: the first overrules the decision in Amaro v. Continental Can. Co., 724 F.2d 747 (9th Cir. 1984) (Dorman, – F.3d –, No. 18-15281, 2019 WL 3926990 (9th Cir. Aug. 20, 2019) (slip op.) (“Dorman I”)); and the second concludes that an individual’s ERISA claim may be subject to the plan’s arbitration provision (Dorman, — F. App’x –, No. 18-15281, 2019 WL 3939644 (9th Cir. Aug. 20, 2019) (slip op.) (“Dorman II”)).
Dorman, a former Schwab employee, filed a putative class action under ERISA §502(a)(2) and (3), alleging that defendants violated ERISA and breached their fiduciary duties by including poorly performing Schwab-affiliated investment funds in the defined contribution 401(k) retirement plan to generate fees for Schwab. Dorman I, 2019 WL 3926990 at *1-*2.
In December 2014, the plan was amended to require that “[a]ny claim, dispute or breach arising out of or in any way related to the plan shall be settled by binding arbitration.” Id., 2019 WL 3926990 at *2.
Continue Reading Irreconcilable Differences: In Dorman v. Charles Schwab Corp., Ninth Circuit Overrules 35-Year-Old Authority; Concludes ERISA Claims Subject to Mandatory Arbitration.
In Vest v. Resolute FP US, Inc., 905 F.3d 985 (6th Cir. 2018), the Sixth Circuit Court of Appeals upheld dismissal of a claim by the beneficiary of a deceased employee that the employer breached its fiduciary duty under ERISA §502(a)(3), 29 U.S.C. §1132(a)(3) by failing to notify the decedent of his right to port or convert his group life insurance coverage to an individual life insurance policy after he ceased active employment.
Continue Reading Sixth Circuit Finds No Fiduciary Duty To Give Notice Of Conversion/Portability Rights On Termination Of Employment
The Second Circuit recently held that alleged misrepresentations by a “ministerial” plan representative about plan benefits will not support a claim for breach of fiduciary duty if the SPD clearly provides “complete and accurate” information, but might support a claim for breach of fiduciary duty if the SPD does not. In re DeRogatis, 16-977-cv, 16-3549-cv (2d Cir. Sept. 14, 2018) (slip op.).
Emily DeRogatis brought two lawsuits concerning benefits under her deceased husband’s pension and health plans. She claimed that two plan employees provided inaccurate information about her husband’s eligibility for, and the amount of, survivor benefits payable under the pension plan, and the impact of early retirement on health benefits under the welfare plan.
Continue Reading Second Circuit Speaks On When Ministerial Acts Can Breach a Fiduciary Duty
In Munro v. University of Southern California, No. 17-55550, 2018 U.S. App. LEXIS 20522 (9th Cir. July 24, 2018), the U.S. Court of Appeals for the Ninth Circuit held that employees alleging an ERISA breach of fiduciary duty claim against their employer based on the employer’s administration of defined-contribution plans may not be compelled to arbitrate their collective claims under the terms of the arbitration clause in their employment contracts because their claims were brought on behalf of the plans and not on their own behalf.
The lawsuit was brought by nine current and former USC employees. The employees alleged that USC breached its fiduciary duty under ERISA in administering two defined-contribution plans – the USC Retirement Savings Program and the USC Tax-Deferred Annuity Plan (the “Plans”). The employees sought financial and equitable remedies to benefit the Plans and all affected participants and beneficiaries, including “a determination as to the method of calculating losses, removal of breaching fiduciaries, a full accounting of Plan losses, reformation of the Plans, and an order regarding appropriate future investments.”…
Continue Reading Ninth Circuit Holds That Employees’ ERISA Breach of Fiduciary Duty Claim Against Their Employer is Not Subject to the Mandatory Arbitration Clause in Their Employment Contracts
On July 3, 2018, a District Court in Alabama upheld, on reconsideration, its initial decision to dismiss a plaintiff’s breach of fiduciary duty claim under ERISA § 502(a)(3), 29 U.S.C. § 1132(a)(3), finding that ERISA § 502(a)(1)(B), 29 U.S.C. § 1132(a)(1)(B), provided the plaintiff with an adequate remedy. This decision adds to the growing amount of case law regarding whether—and when—a breach of fiduciary duty claim should be dismissed in benefit claim litigation.
Continue Reading Court Upholds Dismissal of Breach of Fiduciary Claim, Finding Plaintiff Had an Adequate Remedy Under ERISA § 501(a)(1)(B)