In December 2018, we reported here that the Second Circuit became the first court at any level to allow an ERISA stock-drop claim to survive a motion to dismiss since the Supreme Court revamped the pleading standard for such claims several years ago. The Second Circuit reinstated a claim for breach of fiduciary duty under
The ERISA Litigation Group
Second Circuit Revives Dismissed ERISA Stock-Drop Suit
The Second Circuit reinstated a claim for breach of fiduciary duty under ERISA brought by participants in IBM’s 401(k) plan who suffered losses from their investment in IBM stock. Jander v. Retirement Plans Committee of IBM, et al. 2018 WL 6441116 (2d Cir. Dec. 10, 2018). In so ruling, the Second Circuit became the…
Fifth Circuit Remands for Determination of Whether Surcharge is Appropriate
In Gearlds v. Entergy Servs., Inc., 2013 WL 610543 (5th Cir. Feb. 19, 2013), the Fifth Circuit held in light of CIGNA Corp. v. Amara that plaintiff pled a plausible claim for relief for losses he claims to have suffered from foregoing benefits under his wife’s retirement plan, and remanded to the district court…
Nortel Reaches Settlement with Retirees
In In re: Nortel Networks Inc., No. 1:09-bk-10138 (Bankr. D. Del. 2013), Nortel Networks Inc. reached a settlement with over 3,000 of its retired employees for nearly $67 million. Nortel, a former telecom equipment maker, filed for bankruptcy in 2009. In the subsequent four years, Nortel sold off nearly all of its assets, but…
Eleventh Circuit Refuses to Excuse Exhaustion
In McCay v. Drummond, 2013 WL 616923 (11th Cir. Feb. 20, 2013), the Eleventh Circuit held that deficiencies in a notice of denial of benefits did not excuse a participant’s failure to appeal within a designated 180-day time period. In so ruling, the Court reasoned that plaintiff’s allegations of defendant’s noncompliance with ERISA’s technical…
Arbitrator Determined to Have Erroneously Denied Enforcement of Indemnification Agreement
In Schafer v. Multiband Corp., 2013 WL 607910 (E.D. Mich. Feb. 19, 2013), a district court vacated the decision of an arbitrator who concluded that indemnification agreements executed in connection with the establishment of an employer stock ownership plan and an employee stock ownership trust violated ERISA § 410(a), 29 U.S.C. § 1110(a). The…
Hospital Lacks Standing Without Proper Authorization
In MHA, LLC v. Aetna Health, Inc., 2013 WL 705612 (D.N.J. Feb. 25, 2013), a district court held that a hospital lacked standing to bring a claim for benefits under ERISA because its patients had only authorized the payment of benefits, and had not assigned their rights to recover those benefits.
Employers’ Discretion Over Whether to Pay Contributions Does Not Confer Fiduciary Status
In Int’l Painters and Allied Trades Indus. Pension Fund v. Clayton B. Obersheimer, Inc., 2013 WL 594691 (D. Md. Feb. 13, 2013), a district court rejected plaintiffs’ contention that company officers were acting as ERISA fiduciaries in connection with the company’s delinquent contributions to a pension plan because they exercised discretionary control over the…
Second Circuit Issues Additional Ruling on Scope of Moench Presumption
In Taveras v. UBS AG, 2013 WL 692535 (2d Cir. Feb. 27, 2013), the Second Circuit held the Moench presumption of prudence did not apply to fiduciaries of an eligible individual account plan where the plan document neither required nor “strongly” encouraged investment in the defendant’s stock fund. The Court accordingly reversed and remanded…
Seventh Circuit Enjoins Enforcement of ACA Based on Religious Beliefs
In Grote v. Sebelius, 2013 WL 362725 (7th Cir. Jan. 30, 2013), the Seventh Circuit held that members of the Grote family, and their company, Grote Industries, were entitled to an order enjoining enforcement of the Affordable Care Act’s requirements that non-grandfathered health plans cover certain preventative health services, including contraceptives, without cost-sharing. Plaintiffs…