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 a recent decision involving fiduciary duties in Employee Stock Ownership Plans (ESOPs), the Supreme Court emphasized an important limit on the pre-eminence of the plan document. Recent Supreme Court decisions, primarily in the welfare benefit plan context, have emphasized the primary importance of the plan document in establishing a fiduciary’s obligations and a participant’s rights.
Continue Reading Supreme Court Emphasizes that ERISA Plans Are Not Always Pre-Eminent

I imagine that, for a federal judge, getting reversed is not pleasant, even though it’s part of the job. Well, pity poor Judge Larimer of the Western District of New York, who has now been reversed three times in the same case – twice by the Second Circuit and once by the Supreme Court.
Continue Reading Frommert v. Conkright: The Saga Continues, or “Strike Two for Xerox”

In Heimeshoff v. Hartford Life & Acc. Ins. Co., 571 U.S. __ (Dec. 16, 2013) , the Supreme Court held that a contractual limitation provision under which the clock begins to run before administrative remedies are exhausted  is enforceable under ERISA, as long as a reasonable time is left after exhaustion is expected to occur.

Julie Heimeshoff filed a claim with Hartford for benefits under a disability plan established by WalMart. The plan provided that litigation must be commenced within three years after proof of loss was due. The Court noted that, under applicable ERISA regulations, the typical ERISA claim would be fully administered in about a year, perhaps as long as 16 months. Thus, one would ordinarily expect a claimant to have 1-1/2 to 2 years to bring suit after a claim was fully administered.

When Heimeshoff’s claim was fully administered, she had about 1 year left under the limitation provision to sue. But she waited almost three years, making her suit almost 2 years late under the contractual provision. Hartford and WalMart moved to dismiss Heimeshoff’s action as untimely, and the District of Connecticut agreed, applying Second Circuit precedent enforcing an identical limitation provision. Heimeshoff appealed, and the Second Circuit affirmed on the same basis. The Supreme Court granted certiorari to  resolve a split in the circuits regarding the enforceability of a contractual limitation provision that starts to run before administrative remedies are exhausted. (The District Court and the Second Circuit also found that Heimeshoff could not establish a basis for equitable tolling of the limitation period; the Supreme Court declined to grant certiorari on that question).

The Supreme Court unanimously affirmed the dismissal of Heimeshoff’s action.
Continue Reading Heimeshoff v. Hartford Life: Supreme Court Holds that Plan Can Start Limitation Clock Before Benefit Claim Accrues

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

In petitioning for certiorari, Heimeshoff asked the Supreme Court to consider three questions:

1.         When should a statute of limitations accrue for judicial review of an ERISA disability adverse benefit determination?

2.         What notice regarding time limits for judicial review of an adverse benefit determination should an ERISA plan or its fiduciary give the claimant with a disability claim?

3.         When an ERISA plan or its fiduciary fails to give proper notice of the time limits for filing a judicial action to review denial of disability benefits, what is the remedy?

The Supreme Court granted certiorari, but only as to the first issue, as to which there was a conflict among the Circuits.

There are several axioms and rules underlying this case that are not in dispute.
Continue Reading Heimeshoff v. Hartford – Supreme Court Briefing

Hartford moved to dismiss the action because it was filed after the expiration of the policy’s contractual limitation period. The plain language of the Policy gave her until December 8, 2005 to submit proof of loss: she alleged that her disability began on June 6, 2005; the ninety-day Elimination Period would ordinarily end on September 6, 2005, but her Elimination Period lasted two days longer because Wal-Mart made salary continuation payments to her until September 8, 2005; the start of the period for which Hartford would owe payment (if Heimeshoff had proven disability) was September 9, 2005; proof of loss was due ninety days later, or December 8, 2005. The deadline for taking legal action was therefore three years after that, or December 8, 2008.
Continue Reading Heimeshoff v. Hartford – Motion to Dismiss

Wal-Mart established an employee benefit plan to provide disability benefits to its employees, which it funded through a group disability policy issued by Hartford.  The policy contained a contractual limitation provision specifying the deadline for lawsuits: “Legal actions cannot be taken against the Hartford … after … 3 years after the time written proof of loss is required to be furnished according to the terms of the policy.” Written proof of loss was due 90 days after the end of the Elimination Period; since the Elimination Period was 90 days, proof of loss was due 180 days after the claimed date of disability, and the deadline for any suit would be roughly 3-1/2 years after the claimed date of disability.
Continue Reading Heimeshoff v. Hartford – Facts and Chronology

In a post from last year, I reported on how the Fifth Circuit had issued a decision In ACS Recovery Servs., Inc. v. Griffin, 676 F.3d 512, 514 (5th Cir. 2012), in which it held that an ERISA plan beneficiary and his lawyer had created a perfect settlement structure in which no one ever had enough possession or control over the substantial settlement proceeds to support an equitable remedy.

The Fifth Circuit decided that the shell game issue was “enbancworthy” and, in a May 7, 2013 decision, reversed the panel’s decision.
Continue Reading Fifth Circuit Ends “Texas Shell Game,” Holding that Plan Has an Equitable Remedy for Reimbursement