In Oregon Teamster Employers Trust v. Hillsboro Garbage Disposal, Inc., 800 F.3d 1151 (9th Cir. 2015), the corporate defendant, Hillsboro Garbage entered into contracts with a union health plan that provided coverage for Hillsboro’s union and non-union employees. Beginning in 2003, the union received contributions for the two individual defendants, who purportedly worked for Hillsboro, but actually were employed by a different company owned by Hillsboro’s owner. The plan covered these defendants until 2011, even though a 2006 audit showed that they were not eligible for coverage.
Continue Reading Ninth Circuit judge calls for en banc review to overturn Providence Health v. McDowell

In Sirva Relocation, LLC v. Richie, 794 F.3d 185 (1st Cir. 2015), ERISA preemption met federal abstention, and lost. Knight was an employee of Sirva, which had a disability plan insured by Aetna. Knight received 24 months of disability benefits, which were then terminated under a mental illness limitation; he responded by filing a discrimination charge against Sirva and Aetna with the Massachusetts Commission Against Discrimination (MCAD), alleging that Sirva and Aetna paid disparate benefits depending on whether the claimant suffered from a physical or mental impairment. Sirva and Aetna moved to dismiss, arguing ERISA preemption, and, after a three-year wait, MCAD denied the motion without prejudice.
Continue Reading First Circuit Applies Younger abstention doctrine to ERISA preemption claim

Typically, ERISA litigation starts with a concrete plan, whether it is a retirement plan or an insurance plan. It is much more unusual to have an ERISA dispute turn on whether there is a plan at all. It is still more unusual to have the employee arguing that ERISA governs, and the employer arguing that it does not. But that is the dispute in Okun v. Montefiore Med. Ctr., 793 F.3d 277, 279 (2d Cir. 2015).
Continue Reading When does ERISA govern a severance plan?

Heimeshoff v. Hartford Life & Acc. Ins. Co., 134 S. Ct. 529 (2013), held that a contractual limitation period in an ERISA plan is enforceable as written unless the period is unreasonably short, or a “controlling statute prevents the limitations provisions from taking effect.” In Heimeshoff, there was no dispute that the contractual limitation provision was consistent with the law of the forum state (Connecticut). But what happens when the contractual limitation period is shorter than the minimum period allowed by applicable state law?
Continue Reading State Law Is Not A “Controlling Statute” Overriding Contractual Limitation

Sherfel v. Newson, — F.3d –. 2014 WL 4812275 (6th Cir. Sept. 30, 2014), concerned an STD plan covering employees in 49 States. The plan allowed its administrator to pay STD benefits only to employees who qualify as disabled under the plan. The court observed that “ERISA then federalizes that limitation, by requiring the

The Supreme Court heard arguments yesterday in this case, which involved the question whether a contractual limitations period in an ERISA benefit plan could begin to run before administrative remedies were exhausted.
Continue Reading Heimeshoff v. Hartford – Oral Argument in the Supreme Court

The Fourth Circuit recently gave a succinct reminder about the difference between ordinary conflict preemption and complete preemption, and how those two doctrines impact federal jurisdiction. In Moon v. BWX Technologies, Inc., 2012 WL 5992209 (4th Cir. Dec. 3, 2012), the court considered whether the district court correctly denied a motion to remand a case that had been removed from state court. Briefly, the facts were that the plaintiff’s husband enrolled in a life insurance benefit plan shortly before he retired. After his post-retirement death, his wife sought the insurance benefit, and her claim was denied. She then sued the employer in state court (apparently acknowledging that the benefit plan did not cover the loss, so she did not sue the insurer), arguing that the employer’s communications with her husband had created a non-ERISA contractual obligation. The employer removed the case to federal court, and the district court denied a motion to remand before addressing the merits of the claim.
Continue Reading ERISA’s “Ordinary Conflict Preemption” Is Not a Basis for Federal Jurisdiction; “Complete Preemption” Is

Here’s a quiz to test your preemption mojo.

Scenario 1: Employee transfers to an affiliate of employer, intending to return in the future. Employer orally agrees that it will maintain the benefits of its retirement plan for employee as if he was still an employee. Employee never returns, and later sues employer for the promised benefit.

Scenario 2: Employee leaves employer (and retirement plan) and later returns. Upon his return, he signs a written agreement with employer that, because of a recent amendment to the retirement plan, employee will be able to retire with full benefits in eight years. Before those eight years are up, employer amends the plan again, such that employee receives less than a full benefit when he retires. Employee sues to obtain the full benefit promised in the separate agreement.

Does ERISA preempt both? Neither? One (which one)? Extra credit: why?

Continue Reading ERISA Preemption Quiz

Plaintiffs’ attorneys often will attempt to assert state law claims against an ERISA plan administrator. It’s possible they don’t know any better. It’s also possible, though, that they try to hammer the same point in case after case, and hope to find a judge who will agree with them. The most likely state law claims are for bad faith or unfair claim practices. Though it is easy enough to cite the broad preemption provisions in ERISA – and they are very broad –  it can only help to explain the policy underlying the preemption:

[T]he detailed provisions of [ERISA] set forth a comprehensive civil enforcement scheme that represents a careful balancing of the need for prompt and fair claims settlement procedures against the public interest in encouraging the formation of employee benefit plans. The policy choices reflected in the inclusion of certain remedies and the exclusion of others under the federal scheme would be completely undermined if ERISA-plan  participants and beneficiaries were free to obtain remedies under state law that Congress rejected in ERISA.

Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 54 (1987).

Continue Reading Using Congressional Policy – Part 3 – Preemption