Seventh Circuit

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A recent decision by the Eighth  Circuit Court of Appeals, Jones v. Aetna Life Ins. Co., No. 16-1714, 2017 U.S. App. LEXIS 8112 (8th Cir. May 8, 2017), provides another signal that those of us defending against benefit claims increasingly may have to contend with simultaneous equitable claims for breach of fiduciary duty. Though the law is developing in this area (when is ERISA law not “developing”?), and likely will vary from circuit to circuit, you can expect more plaintiffs to add an equitable claim to a benefits complaint, and you can expect at least some courts to allow those claims to go forward. What strategies will prove most effective in responding to this latest tactic? While there are no definitive answers at this point, there are some ideas to consider.
Continue Reading It May Be Time to Start Thinking About Equitable Claims Again

In Geiger v. Aetna Life Ins. Co., 845 F.3d 357 (7th Cir. 2017), Aetna initially determined that plaintiff qualified for disability benefits due to bilateral avascular necrosis in her ankles, which prevented walking and driving. When the definition of disability was about to change, Aetna conducted an Independent Medical Exam, which found her capable of sedentary work, and had plaintiff surveilled, which showed her driving and visiting multiple stores. Aetna terminated benefits. On appeal, Aetna reinstated benefits in May 2013, after one of two peer reviewers determined  she was not capable of sedentary work.

Aetna later conducted additional surveillance, again showing plaintiff driving and shopping, and terminated benefits again in May 2014, based on a nurse’s clinical review and a Transferrable Skills Analysis. On appeal, Aetna had obtained a third peer review, which concluded that plaintiff could perform sedentary work. Aetna also sent the peer review and surveillance to plaintiff’s doctors; only one responded, and said that the surveilled activities were the result of substantial amounts of pain medication. A follow up peer review did not  change the initial conclusion.
Continue Reading Disability Plan Administrator Can Reasonably Change its Mind About Sufficiency of Evidence

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

In Penn. Chiro. Assoc. v. Independence Hosp. Indem. Plan, Inc., — F.3d –, 2015 WL 5853690 (7th Cir., Oct. 1, 2015), two chiropractors who had signed preferred provider agreements with an insurer claimed that the insurer violated ERISA in determining payments to them. In particular, plaintiffs claimed that the insurer had improperly recouped overpayments without holding a hearing.

As the court described the function of the agreement: “Providers bill the insurer directly and do not know (or care) whether a given patient obtained the coverage as part of an ERISA welfare-benefit plan or through some other means, such as an affinity-group policy or an insurance exchange under the Affordable Care Act.”
Continue Reading Preferred provider agreements do not support ERISA claim

Orr v. Assurant Employee Benefits, 786 F.3d 596 (7th Cir. 2015), concerned the failure to exhaust administrative remedies following the denial of a claim for AD&D benefits. The plan in question required two administrative appeals; the administrator advised plaintiffs of these two appeals, and specifically stated that the failure to complete both reviews…

In Mead v. Reliastar Life Ins. Co., — F.3d –,  2014 WL 4548868 (2d Cir. Sept. 16, 2014), the district court determined that Reliastar’s decision on plaintiff’s disability claim was arbitrary and capricious, and remanded the matter to Reliastar to calculate the benefits owed for plaintiff’s own-occupation disability, and to determine whether she was disabled from any occupation. Reliastar appealed, and plaintiff moved to dismiss for lack of appellate jurisdiction, arguing that the remand order was not a “final decision” under 28 U.S.C. § 1291. The court noted that it had “never definitively decided whether, or under what circumstances, a district court’s remand to an ERISA plan administrator is immediately appealable.” It held now that it was not appealable.
Continue Reading Second Circuit Evaluates Split in Circuits, and Rules That Order Remanding Claim to Administrator Is Generally Not Appealable

Every so often a bit of legal synchronicity seems to occur. Sometimes its personal, like when you have several cases with the same uncommon issue, or multiple cases in the same rarely visited court. In 2013, there appears to be a larger force at work that has caused three circuits to address the question whether a plan that requires proof to be satisfactory to the insurer confers discretion.

It has long been clear that a plan document must give discretionary authority to an insurer in order to require courts to conduct an arbitrary and capricious review. It is also well-established that no “magic words” are required to give discretion. However, the vast majority of plans intending to grant discretion use the magic words anyway, and say that the insurer has “discretionary authority to determine claims and construe the plan” or some variant.

But what happens when a plan does not use the magic words?  
Continue Reading Effect of Requiring “Satisfactory” Proof Is A Popular Issue in the Circuits This Year

ERISA requires fiduciaries to follow a prudent person standard regarding investment decisions. For plans requiring investment in the employer’s stock, often called Employee Stock Ownership Plans, or ESOPs, courts have developed a presumption that the investment in employer stock is prudent. A recent 9th Circuit case has addressed the limits of that presumption. Harris v. Amgen, Inc., — F.3d –, 2013 WL 2397404 (9th Cir. June 4, 2013).
Continue Reading Presumption that Plan Administrator Acted Prudently Does Not Apply in Stock-Drop Case

Revenue sharing is an arrangement under which a mutual fund in which pension assets are invested pays a portion of its fees to the entity that services the pension plan. In Leimkuehler v. American United Life Ins. Co., 713 F.3d 905 (7th Cir. 2013), the Seventh Circuit held that the arrangement did not violate ERISA fiduciary duties (at least as implemented in the case at hand). The court provided a helpful explanation of what revenue sharing was in general, and how it fits into the context of the management and operation of a 401(k) plan.
Continue Reading Revenue Sharing in 401(k) Plans is OK, According to the Seventh Circuit