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Recent Developments in Employee Benefits Law (PDF)

"This article surveys recent developments in employee benefits law from fall 2013 through fall 2014.... The first portion of the survey reviews two important Supreme Court cases from last term, Fifth Third Bancorp v. Dudenhoeffer and Heimeshoff v. Hartford Life & Accident Insurance Co. ... The second portion of the survey reviews eight important decisions issued by the appellate courts during the last year[.]"

Recent Developments in Employee Benefits Law (PDF)

10 pages. "This article surveys recent developments in employee benefits law from Fall 2018 through Fall 2019. In particular, this survey reviews six decisions issued by United States Circuit Courts of Appeals during this time frame. Last year, the Circuit Courts provided important analysis regarding ... the 'actual knowledge' standard under Section 413(2), the pleading standard of employer 'stock drop' lawsuits, cross-plan offsetting of overpayments, fee investment litigation, and mandatory arbitration provisions. This article surveys key cases from the last year on these topics."

Seventh Circuit Affirms Trial Judgment for Defendants in Indianapolis Power & Light 401(k) Stock-Drop Case (PDF)

5 pages. Excerpt: On January 2, 2008, the Court of Appeals for the Seventh Circuit upheld a defense judgment in a 401(k) employer stock case following a bench trial on breach of fiduciary claims. Nelson v. Hodowal, ___ F.3d ____, 2008 WL 90057 (7th Cir. Jan. 2, 2008). The Seventh Circuit's decision is undoubtedly significant as only the second appellate decision following a trial on the merits of fiduciary breach claims arising out of the decline of employer stock in a defined contribution plan.

Fourth Circuit Affirms Trial Judgment for Defendants in US Airways 401(k) Stock-Drop Case (PDF)

9 pages. Excerpt: On August 1, 2007, the Court of Appeals for the Fourth Circuit upheld a defense judgment in a 401(k) employer stock case following a bench trial on breach of fiduciary claims. The appellate court's analysis of the Eastern District of Virginia's 58-page opinion presents a roadmap for how plan sponsors and fiduciaries should deal with employer stock in defined contribution plans.

Simple, State-Law Tort Suit Over Car Wreck Turned Into Federal Preemption Case Revolving Around the Unfathomable Morass Called ERISA

"The year of the West Virginia Supreme Court of Appeals has ended with a series (seven, by my count) of dissents and one reluctant concurrence from Justice Starcher. In a case involving a hospital's subrogation claim: 'I dissent because, in my 12 years on the appellate bench, I have too often seen arcane procedural decisions like this one flow forth from this Court. These decisions brilliantly and eloquently describe the trees, while failing to recognize the surrounding forest. These kinds of decisions may be technically correct, but they wholly miss the public policy waves that will ripple from the Court's decision[.]' "

Participant Must Reimburse Plan Even When State Law Precluded Tort Claim for Medical Benefits

"The appeals court in this case agreed that 'the language of the plan plainly does not limit the plan's ability to recover its expenditures for medical expenses to an award for medical expenses only.' Regarding the claim that state law prevented the participant from claiming medical expenses in his tort personal injury action, the court stated that regardless of the state statute, the language of the plan requiring reimbursement to the plan is 'clear and controlling'[.]" [Board of Trustees of the Nat'l Elevator Industry Health Benefit Plan v. McLaughlin, No. 14-1308 (3d Cir. Oct. 1, 2014) (unpublished)]

10th Circuit: Claim Under Wyoming Bad Faith Tort Law Preempted by ERISA (PDF)

Excerpt: Because there is no question that the tort of insurance bad faith 'relates to' ... an ERISA-regulated employee benefit plan, Moffett's state law claim for bad faith is preempted unless exempted from preemption by the saving clause.... Moffett argues that the Wyoming law of bad faith insurance regulates insurance so as to escape ERISA's preemption clause. We agree with the district court that it does not. [Moffett v. Halliburton Energy Serv. Inc., No. 00-8083 (10th Cir. May 29, 2001)]

Domestic Program's Big Goals: Bush Ready for Fights on Social Security, Tax Code, Tort Law

Excerpt: President Bush, in closing a two-day White House economic conference Thursday that outlined an ambitious domestic policy agenda, declared: 'I like to confront problems.' And problems he will find as he swings for the bleachers with a plan for a fundamental overhaul of Social Security that promises a Washington brawl rivaling any domestic policy fight of the past two decades.

Best Practices for ERISA Plan Sponsors and Fiduciaries in a Changing World: Staying Joined at the Hip to a Good Trial Lawyer

"[T]he ever-expanding range of risks that plan sponsors and fiduciaries are facing, and the rapidly evolving decisions they have to make, call for a litigator’s advice, and preferably not any litigator, but one with both significant courtroom experience and deep substantive knowledge of ERISA."

California Appellate Court Says Plaintiffs Can Enforce Paid Sick Leave Law Through PAGA

"The Fourth District stands alone in concluding that a PAGA claim for civil penalties can be based on alleged violations of the Healthy Workplaces, Healthy Families Act of 2014, a statute which expressly limits a plaintiff's remedies to equitable, injunctive, or restitutitonary relief. However, with several federal court and state trial court judges reaching the opposite conclusion, it is unlikely that this decision will be the final word on the subject." [Wood v. Kaiser Foundation Hospitals, No. D079528 (Calif. Ct. App 4th Dist. Feb. 24, 2023)]

Fifth Circuit Holds Medical Provider Tort Claim Against NFL Is Preempted by ERISA

"The court explained that the essence of Advanced's claim is that the NFL facilitated a coverage denial. To prevail on its state-law claim, Advanced has to show that its patients were covered by the ERISA plan, that they assigned their right to plan benefits to Advanced, and that the claims would not be excluded under the terms of the plan. Because plan interpretation is essential to Advanced's tort claim, it is completely preempted." [Advanced Physicians, S.C. v. National Football League, No. 20-10998 (5th Cir. Jul. 1, 2021; unpub.)]

The Fight Over the Patients' Bill of Rights: Why Hatred of Trial Lawyers Plays a Large Role

"It is easy to agree to grant patients the right to get something they already receive, and that is exactly what, for the most part, both versions of the bill have done. The real fight ... has to do with a very small but significant gap between the two versions. It has to do with how HMOs will be sued in America in tort ... the effect of ERISA has been to cut off the right of employees who receive health insurance through their employers to sue their HMOs in tort."

Health Care Provider's Tort Claims Preempted Under Fifth Circuit ERISA Jurisprudence

Excerpt: In this opinion out of the Southern District of Texas, the Court finds the health care provider's claims for reimbursement preempted where the provider sued the health plan asserting 'tort claims flowing from the direct communications and business relationship between the parties.' The presence of an assignment of benefits and the absence of claims based upon a managed care contract contributed largely to the plan's successful defense.

Ninth Circuit Lets Plan Recoup Dissipated Tort Settlement from Future Medical Benefit Payments (PDF)

11 pages. "[A] recent decision from the Ninth Circuit appears to present a possible end-run around Montanile. After reviewing this case and the plan's recoupment clause, this article will examine the potential application of recouping overpayments to other contexts which could facilitate plan administration. A discussion of some of the practical challenges likely to be encountered by plans implementing this remedy will follow ... This article will conclude with a review of some of the policy considerations that plan sponsors should take into account in designing a recoupment provision so as to ameliorate the potentially harsh impact of such clauses." [Mull v. Motion Picture Industry Health Plan, No. 20-56315 (9th Cir. Jul. 25, 2022)]

First Circuit Upholds Trial Court's Reduction of Fee Award to Pension Fund

"While the appellate court commented that this reduction of the lodestar was 'unusually large,' it nevertheless found the trial court's two-pronged rationale for the reduction to be within that court's discretion. First, the fund's victory on the merits was a partial one: it was awarded about $27,000 in damages, having sought nearly $200,000. Second, the trial court noted the initial lodestar amount ($84,657) dwarfed the size of the damage award. The trial court was within its discretion to consider proportionality as one factor in determining the fee award[.]" [Central Pension Fund of the Int'l Union of Operating Engineers and Participating Employers v. Ray Haluch Gravel Co., No. 11-1944P2-01A (1st Cir. Mar. 11, 2014)]

Former YRC Worldwide Employees Denied Jury Trial in Stock-Drop Case

Excerpt: [The District Judge] noted that all federal appellate courts have held that there is no right to a jury trial for ERISA claims. He also pointed out that courts have consistently characterized ERISA actions as akin to common law trust actions that are governed by common law trust principles.

Acknowledgment of Health Plan's Lien on Tort Recovery Did Not Require Attorney to Reimburse Plan (PDF)

"[The employer-sponsored health plan ("Drury")] is essentially attempting to impose personal, or legal, liability on [the employee's attorney ("Casey")] for the benefits it conferred on [the covered employee for his health care costs]. After receiving the settlement funds from [the employee's] personal injury law suit, Casey initially held in trust the $11,423.79 to which Drury claims an interest, but he eventually disbursed the entirety of that sum to [the employee, who subsequently filed for bankruptcy]. Casey thus no longer has any money to which Drury claims an interest." [Treasurer, Trustees of Drury Industries, Inc. Health Care Plan and Trust v. Gooding, No. 11-2885 (8th Cir. Sept. 7, 2012).]

Ninth Circuit: Denial of Attorneys' Fees Was Not Abuse of District Court Discretion Where DOL Was Substantially Justified in Trial Position in ERISA Lawsuit

"[T]he DOL alleged [the owners] sold B+K to an [ESOP] at an allegedly inflated value.... The Appellants won after a five-day bench trial, but the district court denied them attorneys' fees and costs ... The Ninth Circuit held that the district court did not abuse its discretion in denying attorneys' fees upon determining that the government's position was substantially justified, where '[t]he government's expert, despite his errors, arguably had a reasonable basis -- at least at the time of trial -- in questioning whether the company's profits could surge by millions of dollars in just months.' " [Su v. Bowers, No. 22-15378 (9th Cir. Oct. 25, 2023)]

Health Law Requires Continued Insurance Coverage for Patients in Clinical Trials

Excerpt: The law requires health plans to pay the routine care costs of patients who participate in clinical trials for the prevention, detection and treatment of cancer and other life-threatening conditions.

New California Law Requires Insurers to Cover Clinical Trials

"Gov. Gray Davis signed into law yesterday a bill requiring health care plans to cover the costs of clinical trials for cancer patients. The strongest legislation of its kind in the country, the bill requires insurers to cover routine costs associated with all cancer trials."