Search the News Archive

Despite Windsor, District Court Rejects Challenge to Self-Insured ERISA Health Plan's Denial of Coverage for Same-Sex Spouses

"The court first observed that ERISA gives employers broad discretion in writing the terms of welfare benefit plans and does not include an outright anti-discrimination provision. The court then determined that there could not be any violation of ERISA section 510 because there was no adverse employment action." [Jane Roe and Jane Doe v. Empire Blue Cross Blue Shield and St. Joseph's Medical Center, No. 12-cv-04788 (S.D.N.Y. May 1, 2014).]

ISS, Glass Lewis Release 2015 Proxy Voting Updates, Espouse Nuanced Review of Equity Compensation Practices

"ISS will generally recommend voting against a new or amended equity plan if the combination of the foregoing factors indicates that the plan is 'not, overall, in shareholders' interests'.... Glass Lewis has made clear that qualitative factors, such as an effective overall incentive structure, relevance of selected metrics and reasonable long-term payout levels could result in a recommendation in favor of the say-on-pay proposal, even where the Glass Lewis quantitative-based models suggest a pay-for-performance disconnect."

Fifth Circuit: Hospital Enjoys Standing to Seek ERISA Benefits

"The Fifth Circuit ... reasoned that participants have the right to be reimbursed by CIGNA for medical costs incurred at an out-of-network provider, and the fact that participants assigned that right to the hospital 'does not cause [the right] to disappear.' As an express assignee of the patients' rights, the hospital had standing to sue for underpayment of benefits." [North Cypress Medical Center v. Cigna, No. 12-20695 (5th Cir. Mar. 10, 2015)]

Divided Fourth Circuit Panel Rules on Burden of Proving Loss Causation in ERISA Fiduciary Breach Case

"The Fourth Circuit's decision makes a number of significant statements and rulings on the burdens of proof related to loss causation, the meaning of 'objective prudence,' and the standards for reviewing decisions pertaining to stock funds in the wake of the Supreme Court's ruling in Fifth Third v. Dudenhoeffer. Some of the Court's pronouncements are difficult to reconcile with existing case law. If not set aside on en banc or Supreme Court review and if adopted elsewhere, the decision could substantially impact the future conduct of fiduciary breach litigation, as well as plan practices in administering stock funds." [Tatum v. RJR Pension Investment Committee, No. 13-1360 (4th Cir. Aug. 4, 2014)]

Sixth Circuit: ERISA's Whistleblower Provision Doesn't Protect All Volunteered Information

"While the Court agreed that Sexton had given information, it concluded that he had not done so in connection with an 'inquiry' -- regardless of whether inquiry meant something formal or merely an inquiry in the colloquial sense. In so ruling, the Court observed that Congress had enacted approximately four dozen anti-retaliation laws and that most of them include two distinct types of prohibitions: (i) the type that protects employees who report unlawful practices; and (ii) the type that protects employees who participate in inquiries, proceedings, or hearings. With respect to ERISA Section 510, Congress only included the latter and that must be given effect." [Sexton v. Panel Processing, Inc., No. 13-1604 (6th Cir. May 9, 2014)]

Key Considerations for ERISA Investors in Private Investment Funds

"[R]eviewing the terms of the fund documents is a critical aspect to a fiduciary's satisfaction of its fiduciary duties with respect to such investment.... [T]he terms of the fund documents may dictate whether an investment in the fund is an appropriate one for a particular ERISA investor, or whether it is flat out prohibited, or maybe just likely to result in a potential issue, such as a non-exempt prohibited transaction. Similarly, if the ERISA related terms of the fund documents are completely off market in a negative way, then that might make it more difficult for a plan fiduciary to make the case that investing in such a fund is prudent."

ERISA's Six-Year Statute of Repose for Fiduciary Breach Claims Can Be Tolled

"The Eleventh Circuit held that ERISA's six-year statute of repose is not jurisdictional because ERISA does not contain the clear textual indication required to characterize the limitation as such. The Court also explained that, contrary to the trustee's argument, there is well-established precedent holding that statutes of repose are subject to express waiver, particularly when the statute setting forth the limitation period does not contain a categorical rule prohibiting waiver." [Sec'y, U.S. Dept of Labor v. Preston, No. 17-10833 (11th Cir. Oct. 12, 2017)]

Federal District Court Enforces Forum Selection Clause Contained in ERISA Plan

"[The court] observed that forum selection clauses further ERISA's goal of promoting a uniform administrative scheme by having the same court decide all cases relating to a single plan, and also found [the participant's] claim of physical and financial limitations irrelevant to its analysis.... In rejecting [contrary rulings by other courts], the court concluded that ERISA's policy that litigants have 'ready access to the Federal courts' was not intended to supersede the general enforceability of forum selection clauses. Thus, a plan may contractually limit the number of locations where an action 'may be brought.' " [Mathias v. Caterpillar, Inc., No. 16-1846 (E.D. Pa. Aug. 29, 2016)]

District Court Finds Forum Selection Clause Unenforceable in ERISA Action

"ERISA provides that an action 'may be brought in the district where the plan is administered, where the breach took place, or where a defendant resides or may be found.' ... [The court] determined that the word 'may,' as used in this context, could be read as either allowing a plaintiff to file suit in multiple districts or 'as providing a right to ERISA plaintiffs to file their action in the most suitable of these locations.' The court ... identified ERISA's public policy of providing plaintiffs 'ready access to the Federal courts' as a guide for determining the enforceability of the forum section clause.... [T]he court held that ... the most persuasive interpretation protects plaintiffs' option of bringing suit in a convenient forum and determined that the forum selection clause was unenforceable." [Harris v. BP Corp. North America Inc., No. 15-10299 (N.D. Ill. July 8, 2016)]

Eleventh Circuit Decides Sub-Assignee Has Standing to Assert ERISA Claims

"The Eleventh Circuit held that a sub-assignee's claim for payment of a chiropractor's bills against Blue Cross and Blue Shield of Florida were within the scope of ERISA ... [T]he Court explained that the sub-assignee could have brought its claims under ERISA Section 502(a) because each count was based on an alleged wrongful denial of coverage under the plan." [Gables Ins. Recovery, Inc. v. Blue Cross and Blue Shield of Fla., Inc., No. 15-10459 (11th Cir. Dec. 1, 2015)]