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

Congress empowered the Department of Labor to issue rules and regulations governing claims procedures for employee benefit plans under Sections 503 and 505 of the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. 1133, 1135. The United States District Court for the District of Connecticut held that, when exercising discretionary authority to deny a claim for benefits, a plan’s failure to establish or follow reasonable claims procedures in accordance with the regulation entitles the claimant to de novo review of the claim in federal court, unless the plan “substantially complied” with the regulation, in which case an arbitrary and capricious standard applies to the federal court’s review of the claim. The district court further held that a plan’s failure to follow the Department’s regulation results in unspecified civil penalties. The court disagreed, holding that, when denying a claim for benefits, a plan’s failure to comply with the Department of Labor’s claims‐procedure regulation, 29 C.F.R. 2560.503‐1, will result in that claim being reviewed de novo in federal court, unless the plan has otherwise established procedures in full conformity with the regulation and can show that its failure to comply with the regulation in the processing of a particular claim was inadvertent and harmless; civil penalties are not available to a participant or beneficiary for a plan’s failure to comply with the claims‐procedure regulation; and a plan’s failure to comply with the claims‐procedure regulation may, in the district court’s discretion, constitute good cause warranting the introduction of additional evidence outside the administrative record. Accordingly, the court vacated and remanded. View "Halo v. Yale Health Plan" on Justia Law

Plaintiffs filed suit on behalf of a putative class of former participants in an employee stock ownership plan (ESOP) invested exclusively in Lehman’s common stock, alleging that the Plan Committee Defendants, who were fiduciaries of the ESOP, breached their duty of prudence under the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. 1001 et seq. Specifically, plaintiffs alleged that the Plan Committee Defendants breached ERISA by continuing to permit investment in Lehman stock in the face of circumstances arguably foreshadowing its eventual bankruptcy. Plaintiffs also filed claims against Lehman's former directors, including Richard S. Fuld. The district court dismissed plaintiff's consolidated amended complaint (CAC) and second consolidated amended complaint (SAC) for failure to state a claim. The court affirmed. The Supreme Court subsequently held in Fifth Third Bancorp v. Dudenhoeffer that ESOP fiduciaries are not entitled to any special presumption of prudence. After remand, the district court dismissed plaintiffs' third amended complaint (TAC). The court agreed with the district court that, even without the presumption of prudence rejected in Fifth Third, plaintiffs have failed to plead plausibly that the Plan Committee Defendants breached their fiduciary duties under ERISA by failing to recognize the imminence of Lehman’s collapse. The court concluded as it had before, that plaintiffs have not adequately shown that the Plan Committee Defendants should be held liable for their actions in attempting to meet their fiduciary duties under ERISA while simultaneously offering an undiversified investment option for employees’ retirement savings. Accordingly, the court affirmed the judgment. View "Rinehart v. Lehman Brothers Holdings" on Justia Law

Plaintiffs filed suit against United, claiming that United had violated its fiduciary duties under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1132(a)(1)(B), (a)(3), and the terms of ERSIA-governed health insurance plans administered by United, and the Mental Health Parity and Addiction Equity Act of 2008 (the Parity Act), 29 U.S.C. 1185a(a)(3)(A). Plaintiffs also brought three additional counts under New York State law. The district court granted United's motion to dismiss. The court concluded that NYSPA has standing at this stage of the litigation and that Plaintiff Denbo’s claims, but not Plaintiff Dr. Menolascino’s claims, should be permitted to proceed. Therefore, the court affirmed in part and vacated in part, remanding for further proceedings. View "N.Y. State Psychiatric Ass’n v. UnitedHealth Grp." on Justia Law

Plaintiffs, former employees of PwC, filed suit under the Employee Retirement Security Act of 1974 (ERISA), 29 U.S.C. 1001 et seq., alleging that PwC's retirement plan deprived them of so-called "whipsaw payments," which guarantee that plan participants who take distributions in the form of a lump sum when they terminate employment will receive the actuarial equivalent of the value of their accounts at retirement. The PwC plan defines “normal retirement age” as five years of service, so that it coincides with the time at which employees vest in the plan. The court held that the plan’s definition of “normal retirement age” as five years of service violates the statute not because five years of service is not an “age,” but because it bears no plausible relation to “normal retirement,” and is therefore inconsistent with the plain meaning of the statute. Accordingly, the court affirmed the judgment of the district court, but for different reasons than those cited by the district court. The court did not reach the district court's alternative reasons for denying defendants' motion to dismiss. View "Laurent v. PricewaterhouseCoopers LLP" on Justia Law

Plaintiff, a physician, filed suit alleging that his employer Montefiore denied him severance benefits in violation of the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. 1001 et seq. The district court dismissed the complaint for lack of jurisdiction. The court concluded, however, that on the facts alleged in the complaint, the severance policy at issue is a "plan" governed by section 1002(1) of ERISA. The court considered Montefiore's remaining arguments and concluded that they are without merit. Accordingly, the court vacated and remanded. View "Okun v. Montefiore Medical Center" on Justia Law

Plaintiffs, physicians, filed suit against Cigna alleging that Cigna violated the anti-retaliation provisions of ERISA. Plaintiffs moved for a temporary restraining order and preliminary injunction to prohibit Cigna from terminating plaintiffs from its provider network. The district court denied the injunction and plaintiffs appealed. The court held that healthcare providers are not “beneficiaries” of an ERISA welfare plan by virtue of their in‐network status or their entitlement to payment. Patients may assign to their doctors the right to collect payment on their behalf in exchange for medical services, but the doctors in this case do not seek payment; instead, they seek to assert anti‐retaliation protections which were not assigned to them. Accordingly, the court affirmed the judgment. View "Henry L. Rojas, M.D. v. Cigna Health and Life Ins. Co." on Justia Law

The Fund filed suit against Empire under the Multiemployer Pension Plan Amendments Act of 1980 (MPPAA), 29 U.S.C. §§ 1381–1453, after Empire effected a "complete withdrawal" from the Fund. Steven Levine was the sole shareholder of Empire. The Fund also filed suit against Enivel to recover on its judgment against Empire, alleging that Enivel is a trade or business under common control with Empire such that it is jointly and severally liable for Empire’s withdrawal liability. At issue was whether a separate business organization can be held responsible for the liabilities of another commonly controlled entity under the Employee Retirement Income Security Act of 1974 (ERISA), as amended by the MPPAA. The court concluded that, although Enivel and Empire are commonly controlled, Enivel’s limited leasing and sales activity was personal in nature - not primarily for profit - and Enivel did not operate continuously and regularly. The owners did not fragment their business operations over several entities. Rather, Enivel’s mission was primarily personal and any profit it derived was incidental. Therefore, the court concluded that Enivel is not a “trade or business” for the purposes of the MPPAA and affirmed the district court's judgment for Enivel. View "UFCW Local One Pension Fund v. Enivel Properties, LLC" on Justia Law

The Hospital filed an interpleader action under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001 et seq., to resolve competing claims by Barbara Nicholls and Clair Nicholls to certain funds held in the four retirement and pension plans of the late Harold Nicholls. Barbara is Harold's surviving spouse and Claire is Harold's former spouse. The district court granted summary judgment in favor of Claire because the divorce settlement agreement constitutes a qualified domestic relations order (QDRO). The court found that the divorce settlement agreement does not constitute a QDRO because the agreement fails to comply with the requirements of 29 U.S.C. § 1056(d)(3)(C); however, the nunc pro tunc orders constitute valid QDROs that assign funds to Claire from the three retirement and pension plans named in the orders; but because the nunc pro tunc orders do not clearly specify the fourth plan, the orders do not assign funds from that plan to Claire. Accordingly, the court affirmed in part and reversed in part. View "Yale-New Haven Hosp. v. Nicholls" on Justia Law

Plaintiff filed suit under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001 et seq., seeking a pension based on permanent disability. On appeal, plaintiff challenged the district court's grant of defendants' motion for summary judgment. The district court granted the motion based on the ground that the Pension Plan gave defendants discretion to determine an applicant's eligibility for pension benefits and that defendants' reliance on SSA determinations, policies, and procedures in this matter was neither arbitrary nor capricious. The court rejected plaintiff's contentions that the real decisionmaker on her benefits applications was the SSA and that the Trustees exercised no discretion but simply rubber-stamped SSA decisions. The court concluded that the district court properly reviewed the Trustees' denial of plaintiff's application under the arbitrary-and-capricious standard. Further, the record also provides no support for plaintiff's contention that the Trustees' denial of her application for a permanent-disability pension was arbitrary and capricious. The court concluded that all of plaintiff's arguments are without merit and the court affirmed the judgment. View "Ocampo v. Building Service 32B-J Pension Fund" on Justia Law

MetLife appealed the district court's judgment in favor of plaintiff on his claim for pension benefits pursuant to the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001 et seq. The court concluded that MetLife's denial of plaintiff's benefits claim was not arbitrary and capricious where MetLife's rationale for denying plaintiff's claim - that it was impossible to determine whether, or to the extent to which, a FINRA award represented back pay - was not, in fact, unreasonable. The court did not reach MetLife's alternative argument. Accordingly, the court reversed the district court's judgment granting plaintiff relief under ERISA. The court affirmed the denial of plaintiff's request for attorney's fees. View "Roganti v. Metro. Life Ins. Co." on Justia Law