Justia U.S. 2nd Circuit Court of Appeals Opinion Summaries

This case arose from plaintiffs' action against NYU, alleging violations of the Employee Retirement Income Security Act (ERISA) in connection with two retirement plans sponsored by NYU (Sacerdote I). After the district court dismissed most, but not all of the causes of action, plaintiffs filed this action against affiliates of NYU and Cammack, an independent investment management company (Sacerdote II). The district court dismissed all claims against defendants.The Second Circuit dismissed the district court's judgment, holding that the district court erred by determining that Cammack and NYU were in privity such that the rule against duplicate litigation applied to bar recovery against Cammack in Sacerdote II. In this case, Cammack and NYU's interests were not sufficiently identical to support a finding of privity; the bases for liability for NYU and Cammack were not necessarily the same; and it was possible that one party could be found liable and the other not. Cammack and NYU had separate and distinct responsibilities as co-fiduciaries to the plans at issue, and could be found liable for plaintiffs' injuries for separate reasons. Finally, the court held that the representative suit exception to a plaintiff's right to sue each defendant separately did not apply here. View "Sacerdote v. Cammack Larhette Advisors, LLC" on Justia Law

Plaintiffs filed suit under the Employee Retirement Income Security Act (ERISA), alleging that NMSC failed to make the required contributions from 2008 to 2015. The Second Circuit vacated the district court's final judgment in favor of plaintiffs.The court clarified, consistent with circuit and Supreme Court precedent, that an employer in an ERISA action for unpaid contributions is bound to the terms of an ERISA plan document (the Trust Agreement in this case) only if the employer objectively manifests an intent to be so bound, as evaluated under ordinary principles of contract interpretation. The court applied these principles here and held that NMSC did not bind itself to the Trust Agreement -- and the interest rate established under its Delinquency Policy -- until NMSC agreed to the Memorandum of Agreement modifying the collective bargaining agreement in 2014. The court also rejected the Fund's alternative argument that applying ERISA‐plan‐based interest provisions is so fundamental to the functioning of a fund that its trustees may unilaterally impose such provisions on a delinquent employer. View "32BJ North Pension Fund v. Nutrition Management Services, Co." on Justia Law

In this action under the Employee Retirement Income Security Act (ERISA), the Second Circuit affirmed the district court's decision ordering Xerox and others to recalculate plaintiffs' retirement benefits as a matter of equitable reformation and to pay prejudgment interest at the federal prime rate. The court held that the district court did not abuse its discretion by selecting the new hire approach as an equitable remedy to redress the Plan Administrator's notice violations. The court affirmed the district court's decision to use the prime rate because the district court had broad discretion to grant prejudgment interest and to select a rate; carefully considered all the relevant factors in determining whether prejudgment interest was warranted, and, if so, what the rate should be; and thoroughly explained its reasoning for using the federal prime rate. View "Frommert v. Conkright" on Justia Law

Plaintiff filed suit against the plan administrator for Xerox under the Employee Retirement Income Security Act (ERISA) for denial of benefits and breach of fiduciary duty. The Second Circuit held that plaintiff's denial of benefits claim was untimely and that the administrator, not plaintiff, was entitled to summary judgment on the fiduciary duty claim.The court held that a litigant may not bring a denial‐of‐benefits claim under ERISA when the limitations period is six years and his claim accrued twelve years before he sued. The court also held that Frommert v. Conkright, 433 F.3d 254 (2d Cir. 2006), did not order the plan administrator not to apply the so‐called "phantom account offset" to plan participants who did not bring timely denial of benefits claims. Accordingly, the court affirmed in part, reversed in part, and remanded for directions to enter judgment for the administrator and the Xerox Plan. View "Testa v. Becker" on Justia Law

Plaintiffs appealed the district court's dismissal of their action against fiduciaries of IBM's employee stock option plan (ESOP), claiming that defendants violated their duty under the Employee Retirement Income Security Act (ERISA) to manage the ESOP's assets prudently. The Second Circuit reversed the district court's judgment against plaintiffs, holding that plaintiffs plausibly pleaded a duty‐of‐prudence claim even under the stricter "could not have concluded" test used by the district court. In this case, a prudent fiduciary in the Plan defendants' position could not have concluded that corrective disclosure would do more harm than good. View "Jander v. International" on Justia Law

Plaintiff appealed the district court's summary judgment in favor of the trustees of two union-affiliated employee benefit plans on her claims for relief pursuant to the Employee Retirement Income Security Act (ERISA). The Second Circuit affirmed the district court's decision denying plaintiff's claim under section 502(a)(1)(B) of ERISA against the Pension Fund for benefits due, and held that the Pension Fund trustees correctly denied plaintiff's request for an augmented survivor benefit following her husband's death. In regard to plaintiff's section 502(a)(3) claim for breach of fiduciary duty, the court rejected the district court's reasoning that a plan administrator cannot be held liable for unintentional misrepresentations made about the plan's operation by its non‐fiduciary, "ministerial" agent. The court nonetheless affirmed the district court's denial of relief under section 502(a)(3) because the Pension Plan's summary plan description (SPD) adequately described the eligibility requirements for the benefits in question and thereby satisfied the trustees' fiduciary duty to provide complete and accurate information to plan participants and beneficiaries. Therefore, the court affirmed as to Case No. 16‐3549‐cv.The court reversed and remanded as to Case No. 16‐977‐cv, holding that there was an open question of material fact concerning whether the Welfare Fund trustees breached their fiduciary duty to provide plan participants with complete and accurate information about their benefits. View "In re: DeRogatis" on Justia Law

The Second Circuit affirmed the district court's dismissal of plaintiff's Employee Retirement Income Security Act (ERISA) complaint for failure to state claims for which relief can be granted. Plaintiffs challenged the conduct of twelve banks and their affiliates in the FX market from January 2003 through 2014. On de novo review, the court held that plaintiffs failed to state plausible ERISA claims because the facts alleged do not show that defendants exercised the control over Plan assets necessary to establish ERISA functional fiduciary status. Furthermore, the court found no abuse of discretion in the district court's denial of adjournment or leave to file a fourth amended complaint. View "Allen v. Credit Suisse Securities (USA) LLC" on Justia Law

Plaintiff filed suit under Section 502(c)(1) of the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. 1132(c)(1)(B), alleging that defendants failed to timely comply with her request for documents relating to her healthcare benefit plan. The Second Circuit affirmed the district court's dismissal of plaintiff's claim as time-barred. Because ERISA does not specify a statute of limitations for Section 502(c)(1) claims, the courts apply the state statute of limitations that is the nearest analogue. The court held that the most analogous statute of limitations in Connecticut was the one-year statute of limitations for actions to recover civil forfeitures. Applying the one-year limitation, the court held that plaintiff's claim was time-barred. View "Brown v. Rawlings Financial Services, LLC" on Justia Law

Morrone participates in a ʺdefined benefit planʺ offered by the Pension Fund. From 1970-1996, Morrone earned benefits under the Plan; in 1997, he stopped working union jobs. Under the Plan, a participant is entitled to the accrual rates ʺin effect at the time [he] ultimately separates from Covered Employment.ʺ In 1994, the Plan was amended to allow a worker who took a hiatus to bridge the gap by working five years. In 1999, the Plan removed the Five Year Rule and reinstated the Parity Rule, under which a worker with a break in Covered Employment of two or more years could bridge that gap and reactivate pension credits earned pre-hiatus by working for at least as many years after the break as the length of the break. Morrone returned to Covered Employment in 2012 and requested an estimate of the benefits he would receive should he retire in 2017. The estimate applied the Parity Rule: Pension credits that he earned pre-hiatus were assigned the 1996 rate; those earned since 2012 were valued at the current rate. Because Morrone had taken a 15‐year hiatus and would have returned to Covered Employment for only six years as of 2017, he was not entitled to the current accrual rate for his pre-hiatus pension credits. Applying the Five Year Rule would give Morrone an extra $705 per month. The Second Circuit affirmed summary judgment, in favor of the Fund, finding that the 1999 Amendment did not decrease Morroneʹs accrued benefits in violation of ERISAʹs anti‐cutback rule, 29 U.S.C. 1054(g). The higher benefit accrual rates that Morrone demands are not a ʺretirement‐type subsidyʺ but would constitute his normal retirement benefit if he satisfied the conditions to receiving them: the Parity Rule. View "Morrone v. Pension Fund of Local Number One, I.A.T.S.E." on Justia Law

Plaintiffs, retired officers of Booz Allen, filed suit alleging that they were improperly denied compensation when, after their retirement, Booz Allen sold one of its divisions in the Carlyle Transaction. The Second Circuit affirmed the district court's dismissal of the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001 et seq., claims on the ground that Booz Allen's stock-distribution program was not a pension plan within the meaning of ERISA, and denial as futile leave to amend to "augment" the ERISA claims with new allegations; affirmed the dismissal of the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. 1961 et seq., claims on the ground that they were barred by the Private Securities Litigation Reform Act of 1995 (PSLRA), 18 U.S.C. 1964(c); but vacated the district court's judgment to the extent it denied Plaintiff Kocourek leave to amend to add securities-fraud causes of action. The court remanded for the district court to consider his claims. View "Pasternack v. Shrader" on Justia Law