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In re Fid. ERISA Float Litig., 829 F.3d 55 (1st Cir. 2016), held that Fidelity did not breach fiduciary duties to the plans at issue by allegedly earning interest on cash on its way to participants after a redemption had been made. The case involved a number of 401(k) plans that had hired Fidelity as trustee to act as intermediary between the plans, the participants and the mutual funds in which the participants’ funds were invested. In a nutshell, when a participant desired to make a withdrawal, the mutual fund would sell the shares and transfer the cash to Fidelity; Fidelity held the cash at least overnight in an account that allegedly earned interest for Fidelity; and it then distributed the cash to the participant. The plaintiffs, various participants and one plan administrator, sued on behalf of the plans.
Continue Reading Mutual fund redemptions payable to participants are not plan assets, and broker can retain interest earned while holding the cash

Estate of Barton v. ADT Security Svcs. Pension Plan, — F.3d. –, 2016 WL 1612755 (9th Cir. Apr. 21, 2016), involved a plaintiff who worked for about 20 years (with a couple of interruptions) for ADT and affiliated entities. His employers went through several mergers and acquisitions during the period, and some (but perhaps not all) of them participated in the pension plan at issue.
Continue Reading Court shifts burden of proof to plan

It is well-established that ERISA contains what is commonly referred to as a “church-plan exemption” which provides that plans established by churches are not required to abide by ERISA’s many rules and regulations. For many years, a number of courts have held that this exemption also applied to plans that were established by organizations that are affiliated with churches, such as schools (think Notre Dame or Georgetown) or hospitals. In two major decisions a couple of months apart, the Third and Seventh Circuits have held that the exemption is not as broad as other courts have concluded. These cases signal a major new area of ERISA litigation.
Continue Reading ERISA governs plans established by church-related organizations

Roganti v. Met. Life Ins. Co., 786 F.3d 201 (2d Cir. 2015), involved a dispute over the effect an arbitral award for improper employment practices had on pension benefits. The opinion is useful for generalizing into the pension context many of the rules underpinning the arbitrary and capricious standard of review as applied to benefit claims. The court’s generalization of those rules, in turn, can be helpful in benefit claims.
Continue Reading Evidence Supporting a Claim Can Be Insufficient, Even if Undisputed

The Sixth Circuit is fast making itself the center of case law on equitable remedies under ERISA. In Pearce v. Chrysler Group LLC Pension Plan, 2015 WL 3797385 (6th Cir. June 18, 2015), the court held that a material conflict between an SPD and the plan permits a claim for equitable relief, apparently without any other element (like reliance) being required. For more discussion of the Sixth Circuit rulings on this subject in the last year or so, see Rochow 1, Rochow 2, and Stiso.
Continue Reading Sixth Circuit Rules Plan Terms are “Irrelevant” When Considering Equitable Claim

We previously reported on Gabriel v. Alaska Electrical Pension Fund, 755 F.3d 647 (9th Cir. 2014), which addressed limits on make-whole relief under 1132(a)(3), and affirmed judgment for the plan fiduciary. That decision was a divided one, with a partial dissent by Judge Berzon. In December, the panel withdrew its earlier decision, and replaced it with a new decision, Gabriel v. Alaska Electrical Pension Fund, — F.3d –, 2014 WL 7139686 (9th Cir. Dec. 16, 2014). The new decision affirmed summary judgment on two of the three measures of damages, and remanded to the district court on the third.
Continue Reading Ninth Circuit Replaces Gabriel Decision On Equitable Remedies; Modifies Interpretation of Amara

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 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 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