One of the great things about writing this blog is learning something new. I sometimes fall into the trap of determining the law on a particular issue in the circuit in which I practice most (the Second), and assume that other circuits are the same. Sometimes, though, it turns out that one circuit is not in step with the others, and one case can throw a monkey wrench into my world view.

The case that drew back the curtain for me on vesting of welfare benefits (an exciting topic, I know!), is Price v. Bd. of Trustees of Indiana Laborer’s Pension Fund, — F.3d –,  2013 WL 561354 (6th Cir. Feb. 15, 2013) (“Price II”). Price II held that an ERISA fiduciary could enforce a plan amendment shortening the length of time disability benefits would be payable against a participant who was on claim at the time of the amendment.

At first read, the decision seemed bizarre, because I knew (or thought I knew) that welfare benefits like disability benefits could not be changed for a participant who was “on claim.” As the Second Circuit held: “as a matter of law[,] …absent explicit language to the contrary, a plan document providing for disability benefits promises that these benefits vest with respect to an employee no later than the time that the employee becomes disabled.” Feifer v. Prudential Ins. Co. of Am., 306 F.3d 1202, 1212 (2d Cir. 2002). This rule means that you look to the plan language when the disability allegedly began, and subsequent amendments are irrelevant.

Though on re-reading Feifer, it was clear that the court recognized that other circuits approached this issue differently, that kind of caveat was not something that stuck with me. Then along came Price II and caused me to revisit the issue.
Continue Reading Vesting of Employee Welfare Benefits – Who Knew It Was So Complicated?

It is not an issue that arises every day, but it is worth exploring an employer’s remedies when it contributes too much into an ERISA plan. A recent decision in the 8th Circuit, Greater St. Louis Const. Laborers Welfare Fund v. Park-Mark, Inc., 700 F.3d 1130 (8th Cir. 2012), provides an opportunity to do so.
Continue Reading Employers Deserve Equity Too: Restitution for Overpayments to Plan

In Treas., Trustees of Drury Industries, Inc. Health Care Plan and Trust v. Goding, 692 F.3d 888 (8th Cir. 2012), Goding, a plan participant, received benefits under Drury’s health care plan after an accident; the Plan contained an express subrogation agreement. During the course of Goding’s litigation to collect damages for the accident, his attorneys repeatedly acknowledged the Plan’s subrogation rights. Goding settled his lawsuit, and his attorneys initially held in escrow funds necessary to reimburse the Plan, but then disbursed them to Goding. The Plan was unable to obtain reimbursement from Goding after he declared bankruptcy. The Plan then sued Goding’s attorneys, asserting various theories, including equitable lien, restitution and constructive trust.
Continue Reading Participant’s Attorneys Are Not Responsible For Subrogation Unless They Specifically Agree

ERISA claim practitioners generally have the concept of exhaustion of administrative remedies engrained in our thought process. They know well that claimants are required to exhaust their administrative remedies before they can sue over a benefit determination. Given the focus on this exhaustion requirement, it may surprise some to know that, in many circuits, the statute of limitations clock can begin to run well before administrative remedies are exhausted.
Continue Reading Statute of Limitations Can Start Running Before Claim Accrues

The Seventh Circuit has recently considered whether surveillance evidence can be relied upon in deciding ERISA-governed disability claims. Marantz v. Permanente Med. Group, Inc. Long Term Disability Plan, 2012 WL 2764792 (7th Cir. July 10, 2012), involved a de novo review of the claim determination. The claimant was a pulmonologist who developed back pain. After paying benefits for about four years, the claim administrator began to look more closely at the claim, and its investigation included surveillance. As the Seventh Circuit described it:

The surveillance video shows Dr. Marantz running across a busy street in heeled boots; shopping at Home Depot, Neiman Marcus, Loehmann’s, and Nordstrom Rack; lifting heavy items into her car; riding a stationary bike in a group exercise class at a health club; and, after the second day of the evaluation, shopping at a fur store and Petco. The investigators followed Dr. Marantz for five days, but only recorded activity on three of those days. Dr. Marantz testified that one of the surveillance days was unusual in that she was hosting a friend who was visiting Chicago from out-of-town.

Dr. Marantz argued that surveillance was “inherently unreliable.” The Seventh Circuit disagreed, but identified several situations when surveillance “is of limited utility”: “when the recorded data does not conflict with the applicant’s self reports of limitations, or when the surveillance catches limited bursts of activity that might be anomalous.”

The First Circuit has also expressed the same notion more simply: “weight given to surveillance in these sorts of cases depends both on the amount and nature of the activity observed.” Maher v. Massachusetts Gen. Hosp. Long Term Disability Plan, 665 F.3d 289, 295 (1st Cir. 2011).

Marantz held that the activities caught on tape were inconsistent with Dr. Marantz’s statements about what she could and could not do. Marantz also held that, because she engaged in these inconsistent activities after she had worked in her part-time job or had spent several hours in rigorous physical therapy, the activity “cannot be explained by a ‘good days/bad days’ scenario.”

Because the devil is in the details on these kind of issues, a discussion of other Circuits’ evaluation of surveillance evidence is in order.Continue Reading Looking in on Surveillance

The Second Circuit recently issued a decision on autoerotic asphyxiation (which I will call AEA because typing autoerotic asphyxiation really difficult). The decision doesn’t break any new ground, but it’s as good an excuse as any to write about this never-boring topic.

For those of you that have led a highly sheltered life (or were not fans of INXS or Kung Fu) the idea behind AEA is that, if you restrict oxygen while masturbating, the resulting orgasm is better than it would have been had you been able to breathe. According to Wikipedia: “The carotid arteries (on either side of the neck) carry oxygen-rich blood from the heart to the brain. When these are compressed, as in strangulation or hanging, the sudden loss of oxygen to the brain and the accumulation of carbon dioxide can increase feelings of giddiness, lightheadedness, and pleasure, all of which will heighten masturbatory sensations.” Occasionally, electricity is also used, apparently to similar effect.

Which, of course, brings us to ERISA.Continue Reading Autoerotic Asphyxiation and ERISA