Employee Benefits & Executive Compensation Blog

The View from Proskauer on Developments in the World of Employee Benefits, Executive Compensation & ERISA Litigation

Category Archives: Case Summaries

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Equitable Exception To Excuse Interim Withdrawal Liability Payments Rejected

A federal district court in New Jersey recently declined to apply an equitable exception to excuse an employer’s failure to pay interim withdrawal liability payments while it challenged the demand for withdrawal liability. Nat’l Integrated Grp. Pension Plan v. Black Millwork Co., 2:11-cv-05072-KM-MAH (D.N.J. August 1, 2013). After making one withdrawal liability payment, the employer … Continue Reading

Seventh Circuit: Insurance Companies Are Proper Defendants In Suits For ERISA Benefits

The Seventh Circuit held that a health insurer that makes benefits determinations and pays benefit claims, rather than the health plan itself, is a proper defendant in an action for benefits under ERISA Section 502(a)(1)(B).  In Larson v. United Healthcare Ins. Co., No. 12-1256, 2013 WL 3836236 (7th Cir. July 26, 2013) (unpublished), plan participants … Continue Reading

Seventh Circuit: Terminated Employee’s Release Agreement Bars Pension Claim, ERISA’s Anti-Alienation Provision Does Not Apply

The Seventh Circuit dismissed a former employee’s claim for additional pension benefits after concluding that a release agreement he signed had waived any claims that arose prior to the signing of the release and his claim was not protected by ERISA’s anti-alienation provision. Hakim v. Accenture United States Pension Plan, No. 11-3438, 2013 WL 2249454 … Continue Reading

U.S. Supreme Court Decision on DOMA May Impact Status of Children of Same-Sex Spouses for Employee Benefits Purposes

The Defense of Marriage Act (DOMA) defines marriage at the federal level as a legal union between one man and one woman and excuses states from any obligation to recognize same-sex marriages recognized in any other state. As a result, many states have enacted so-called “mini-DOMA” laws providing that those states will not recognize for … Continue Reading

Sixth Circuit: Plan Fiduciary Reasonably Relied On Benefit Calculations In Communicating To Participant

The Sixth Circuit recently rejected a participant’s claim that a benefit estimate should override the specific benefit promised under the terms of the plan. In Stark v. Mars Inc., No. 12-3956, 2013 WL 1908889 (6th Cir. May 9, 2013) (unpublished), the Sixth Circuit affirmed summary judgment in favor of the plan’s fiduciary committee. The plaintiff, … Continue Reading

PBGC Withdraws Two Territorial Coverage Opinion Letters Impacting Puerto Rican Plans

The status of PBGC coverage for Puerto Rico defined benefit plans is one that has been the subject of review and analysis by the PBGC for quite some time. Most recently, on April 19, 2013, the PBGC withdrew two older opinion letters (Opinion Letters 77-172 and 85-19), which addressed whether defined benefit plans established and … Continue Reading

U.S. Supreme Court Agrees To Hear Case On ERISA Statute of Limitations

The U.S. Supreme Court announced on April 15, 2013 that it will take up the question of when the statute of limitations period may begin to run for filing a legal action for long-term disability benefits under an ERISA plan. Heimeshoff v. Hartford Life & Accident Insurance Co., U.S., No. 12-729, cert. granted 4/15/13.… Continue Reading

U.S. Supreme Court Rules That Plan Terms Trump Equitable Defenses

Today, the U.S. Supreme Court issued its ruling in U.S. Airways, Inc. v. McCutchen in which the Court unanimously ruled that a clearly drafted reimbursement clause will trump all equitable defenses. The Supreme Court’s ruling will likely be viewed favorably by plan sponsors, as it will allow them to anticipate with more certainty the impact … Continue Reading

Ninth Circuit Rules on Breach of Fiduciary Duty Claim in Investment Options Case

In Tibble v. Edison Int’l, 10-cv-56406, 2013 WL 1174167 (9th Cir. Mar. 21, 2013), the Ninth Circuit Court of Appeals ruled that 401(k) plan fiduciaries breached their duty of prudence in selecting investment options for the plan and unreasonably relied on a consultant’s advice because they could not prove that either they– or the consultant … Continue Reading

Second Circuit: Deferential Standard Applies Without Notice To Participants & Reimbursement Claims Are Equitable Relief

Yesterday, the Second Circuit ruled on two important issues of note for ERISA plan sponsors and plan fiduciaries. In Thurber v. Aetna Life Insurance Co., 2013 WL 950704 (2d Cir. Mar. 13, 2013), the Court ruled that participants and beneficiaries are not required to be put on notice that: the plan fiduciary has reserved discretion to … Continue Reading

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 to … Continue Reading

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 requirements … Continue Reading

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 agreements indemnified … Continue Reading

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 unpaid … Continue Reading

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 a … Continue Reading

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 sued … Continue Reading

Fourth Circuit Allows Post-Distribution Suits to Enforce State Law Waivers

The U.S. Supreme Court previously held that an ERISA plan administrator must distribute benefits to the beneficiary named in the plan, regardless of any state law waiver purporting to divest that beneficiary of his right to the benefits. That case explicitly left open the question of whether, once the benefits are distributed by the administrator, … Continue Reading

Eighth Circuit Declines to Award COBRA Penalties in the Absence of Prejudice

In In re Interstate Bakeries Corp., 2013 U.S. App. LEXIS 1663 (8th Cir. Jan. 25, 2013), the Eighth Circuit affirmed the district court’s ruling that Hostess’ failure to provide a COBRA notice to a terminated employee did not cause the employee to suffer a sufficient degree of prejudice to be entitled to recovery of statutory … Continue Reading

Third Circuit Rules Statute of Limitations Accrues Upon Receipt of Notice of Distribution From IRS

In Raymond v. Callebaut, 2013 WL 150232 (3d Cir. Jan. 15, 2013) (summary order), the Third Circuit affirmed the district court’s ruling that dismissed plaintiff’s claim seeking benefits due under the terms of a 401(k) plan because plaintiff’s claim was filed more than fourteen years after it had accrued. Plaintiff’s claim was based on an … Continue Reading

Fourth Circuit Concludes Participants Have No Constitutional Standing to Assert Prohibited Transaction Claims

In David v. Alphin, 2013 WL 142072 (4th Cir. 2013), plaintiffs alleged that defendants engaged in prohibited transactions and breached their fiduciary duties by selecting and maintaining Bank-affiliated mutual funds in the investment menu for the Bank’s 401(k) Plan and the Bank’s separate defined benefit pension plan. The Fourth Circuit affirmed dismissal of plaintiffs’ claims. … Continue Reading

Sixth Circuit Rules Claim for Reimbursement is Appropriate Equitable Relief

In Wooden v. Alcoa, 2013 WL 141777 (6th Cir. Jan. 11, 2013), the Sixth Circuit ruled that defendant’s claim for reimbursement of benefits overpayments was appropriate equitable relief because defendant’s claim was properly limited to a specified fund within plaintiff’s general assets — the proportion of income that would have been reduced if she had … Continue Reading

Venue Selection Clause Unenforceable as Contrary to Public Policy

In Coleman v. Supervalu Inc. Short Term Disability Program, 2013 WL 365263 (N.D. Ill. Jan. 31, 2013), the court denied an ERISA plan’s motion to dismiss for improper venue, holding that the venue selection clause was unenforceable. In so ruling, the court concluded that such clauses are contrary to public policy and inconsistent with congressional … Continue Reading
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