First Circuit
In Stephanie C. v. Blue Cross Blue Shield of Massachusetts HMO Blue, Inc., 852 F.3d 105 (1st Cir. 2017), the First Circuit declined to decide the appropriate standard of review to apply to the appellate review of an ERISA decision for health insurance benefits, leaving the question open as to whether de novo or clear error will apply. Id. In Stephanie, the Court found that, under either standard, the claimant was not entitled to medical charges not covered under the Plan. Id. at 117.
In Remington v. J.B. Hunt Transp., Inc., No. CV 15-10010-RGS, 2017 WL 1552316 (D. Mass. Apr. 28, 2017), plaintiffs, owner-operator drivers for J.B. Hunt Transport Inc., a freight and package delivery service, alleged that while their job descriptions and work requirements essentially replicate those of non-owner drivers hired by J.B. Hunt, they are not given the same employment benefits. Plaintiffs asserted claims against J.B. Hunt based upon a variety of state laws, including the Massachusetts Wage Act. The U.S. District Court for the District of Massachusetts concluded that, in order to adjudicate plaintiffs’ Wage Act claims, it would be required to look to the terms of the ERISA plans to determine whether, had plaintiffs been classified as employees, they would have been eligible as plan participants, as well as to determine the value of the benefits the plans would have conferred. Because plaintiffs’ claims for benefits “relate to” J.B. Hunt’s ERISA plans, they are preempted by ERISA. Id. at *3-4. In determining plaintiff’s Wage Act claim to be preempted, the Court stated, “[a]lthough plaintiffs accurately note that their Wage Act claims do not intrude on the internal administration of an ERISA plan, that is not the test of ERISA preemption.” Id. Rather, “ERISA preemption is deliberately expansive. A state law may be preempted as related to an ERISA plan even if the law is not specifically designed to affect such plans, or the effect is only indirect and even if the law is consistent with ERISA’s substantive requirements.” Id.
Second Circuit
In Brown v. Rawlings Fin. Servs., LLC, 868 F.3d 126 (2d Cir. 2017), the Second Circuit addressed the appropriate statute of limitations for a Section 502(c)(1) claim. In Brown, plaintiff was a participant in an ERISA benefits plan administered by Aetna. In late 2010, plaintiff was hurt in a car accident and filed a personal-injury lawsuit to recover damages for her injuries. After the lawsuit was filed, Aetna, with assistance from its contractor, Rawlings Financial Services sent plaintiff a notice of subrogation and imposed a health insurance lien for reimbursement of benefits paid. Plaintiff eventually settled her personal injury lawsuit, but the settlement money was initially withheld because of the lien. Plaintiff filed an ERISA lawsuit against the defendants on October 13, 2015, alleging in part that she made multiple requests for plan documents related to her health plan, with the last request in July 2014. Because ERISA does not specify a statute of limitations for Section 502(c)(1) claims, plaintiff argued the proper statute of limitations was either Connecticut’s six-year statute of limitations for breach of contract, or the three-year statute of limitations for violations of the Connecticut Unfair Trade Practices Act and the Connecticut Unfair Insurance Practices Act. Id. at *1-2. The Second Circuit disagreed, holding “the most analogous state statute of limitations in Connecticut is the one-year statute of limitations for actions to recover civil forfeitures.” Id. Because Section 502(c)(1) required the plan administrator to respond to plaintiff’s document request within thirty days, the court determined that her claim accrued in August 2014. Id. Accordingly, the district court correctly dismissed plaintiff’s claim as time-barred as it was filed over a year later. Id.
In Arnone v. Aetna Life Ins. Co., 860 F.3d 97 (2d Cir. 2017), the Second Circuit considered the effect of a New York statute on an offset to plaintiff’s long-term disability benefits following settlement of a personal injury lawsuit where the governing benefit plan provided Connecticut law controlled the plan’s construction. Defendant took the position that the plaintiff’s personal injury settlement included compensation duplicative of plaintiff’s disability benefits, permitting it to reduce its benefit payment obligation under the plan. Plaintiff disagreed, asserting entitlement to unpaid benefits under Section 502(a)(1)(B) of ERISA. As applicable to the dispute, New York General Obligations Law provides that personal injury settlements “shall be conclusively presumed” not to include “any compensation for the cost of health care services, loss of earnings or other economic loss[es]” that “have been or are obligated to be paid or reimbursed by an insurer.” N.Y. Gen. Oblig. Law § 5-335(a). The Second Circuit concluded the statute “prohibits Aetna’s reduction in [plaintiff’s] disability benefits. We further decide that neither ERISA’s preemptive force nor the Plan’s choice of law provision compels a different conclusion … [Plaintiff] is entitled to the unpaid benefits.” Id. at 99–100. With regard to the plan’s choice of law provision stating the plan “will be construed in line with the law of the jurisdiction in which it is delivered,” the Second Circuit held that the “Plan’s choice of law provision, [] stating that the Plan will be ‘construed’ in accordance with Connecticut law, sets forth only which jurisdiction’s law of contract interpretation and contract construction will be applied … that provision is insufficient to bind this court to apply the full breadth of Connecticut law, to the exclusion of another jurisdiction’s law, in fields other than the interpretation of the language in this contract.” Id. at 107-108.
Third Circuit
In Patrick v. Reliance Standard Life Ins. Co., 694 F.App’x 94 (3d Cir. 2017), the Third Circuit affirmed the district court’s determination that the insurer did not abuse its discretion when it offset the ERISA plan participant’s part-time work earnings. While plaintiff was receiving long-term disability benefits, she generated income by working part-time at her medical practice where she was a partner. The insurer offset plaintiff’s monthly benefit payment against the part-time income she generated. Plaintiff objected to this reduction on the basis that her part-time pay went directly to pay overhead costs and debt she owed to her medical group. The court found this argument “misses the mark because she received the benefit of her earnings by having those funds applied against the deficit she owed her medical practice. That is to say, money may still be earned, even if the funds have never been possessed, so long as the recipient attains its benefit.” Id. at *2. The court also found plaintiff’s argument that she could not control the receipt of her earnings was contradicted by her shareholder agreement with her medical practice. Id. at 3.
In a case of first impression the court held that the plaintiff could not bring a Section 502(a)(2) claim in his representative capacity, where he did not comply with Federal Rule of Civil Procedure 23 (“Rule 23”). Mendenhall v. Out of Site Infrastructure, Inc., No. CV 14-4996, 2017 WL 3394735 (E.D. Pa. Aug. 7, 2017). Plaintiff alleged that the defendants breached their fiduciary duty to him and to his retirement savings plan (the “Plan”) by failing to pay money into his account. Plaintiff sought to expand the scope of the litigation to include all Plan members. Defendants argued that Plaintiff only pled a claim for individual relief and therefore could not proceed on behalf of the Plan. Defendants also asserted that the plaintiff must comply with the class action procedural safeguards set forth in Rule 23 because adjudication for the entire Plan also would adjudicate the rights of other absent Plan participants. Defendants relied on instructive Third Circuit law and cases from other jurisdictions requiring class certification for a representative suit under Rule 23. Id. at *4. The court noted the Third Circuit has previously stated, “[i]n light of the derivative nature of ERISA Section 502(a)(2) claims, breach of fiduciary duty claims brought under Section 502(a)(2) are paradigmatic examples of claims appropriate for certification as a Rule 23(b)(1) class, as numerous courts have held.” Citing In re Schering Plough Corn. ERISA Litig., 589 F.3d 585, 604 (3d Cir. 2009). The court granted defendants’ Motion for Judgement on the Pleadings, and held that plaintiff made no showing that he was the proper representative for the Plan and that plaintiff’s representative capacity claim created “serious issues of claim preclusion, proper fund disbursement, and improper adjudication of absentee party rights.” Id. at *7. The court also declined to permit plaintiff leave to amend the Complaint to reflect that he was proceeding in his representative capacity, finding that plaintiff had not shown that he would be able to sufficiently plead as a class representative. The court held that plaintiff may pursue his claims against defendants in his individual capacity only.
Fourth Circuit
In Trujillo v. Landmark Media Enterprises, LLC, 689 F. App’x 176 (4th Cir. 2017), the Fourth Circuit reversed and remanded dismissal of plaintiff’s ERISA Section 510 claim, and held that the employee’s allegation that he was fired for giving information in legally required audits of a retirement plan was sufficient to state an ERISA retaliation claim. The plaintiff was a terminated employee of Dominion Enterprises, Inc., (a subsidiary of Landmark Media Enterprises, LLC) who brought a Section 510 claim alleging retaliation under ERISA and a state law claim alleging defamation. Plaintiff alleged that he had discovered that Vanguard had not been properly vesting participants in the Landmark retirement plan, causing participants who should have been vesting to lose employer contribution matching funds and plaintiff also alleged that he discovered certain employee contributions were not being properly segregated from payroll. To prepare for completion of Dominion’s Form 5500, plaintiff alleged that he detailed the errors in the retirement plans, which violated ERISA, in letters by management to be filed with the Form 5500. Id. at 177–78. Plaintiff was fired less than one week later. Defendants denied that plaintiff provided this information to them. Relying on Fourth Circuit precedent in King v. Marriott International Inc., 337 F.3d 421 (4th Cir. 2003), the district court ruled that plaintiff had failed to allege that he testified or gave information in any “inquiry or proceeding.” Id. at 178. On appeal, the Secretary of Labor, in an amicus brief, joined the plaintiff in arguing that the Complaint sufficiently alleged he was terminated for giving information in an “inquiry” because he alleged that he was fired for giving information in legally required audits and to prepare the Form 5500. The court concluded, “[g]iven the novel nature of the legal questions presented in this case regarding the scope of the term ‘inquiry or proceeding,’” further factual development was most prudent, “before reaching critical questions of statutory interpretation.” Id. at 179.
In Solomon v. Bert Bell/Pete Rozelle NFL Player Ret. Plan, 860 F.3d 259 (4th Cir. 2017), the Fourth Circuit held that the ERISA plan administrators’ benefit determination was not reasonable, where the administrators failed to address or acknowledge new and uncontradicted medical evidence that supported the plaintiff’s benefit application. Plaintiff played professional football in the National Football League (“NFL”) for nine seasons before his retirement in 1995. During his football career, he sustained over 69,000 full-speed contact hits. Plaintiff experienced symptoms associated with chronic traumatic encephalopathy (“CTE”), a degenerative brain condition caused by repeated head trauma. He also suffered numerous knee injuries. Id. at 261. Plaintiff alleged that he was forced to resign from his post-NFL career as a high school teacher and football coach in 2007, due to his various football injuries. The ERISA disability plan (the “Plan”) covered professional football players, and provided that a retired player was entitled to football degenerative benefits under the Plan if his disability resulted in total and permanent disability (“TPD”) prior to 15 years from the date of retirement. The Fourth Circuit found that the Plan did not require players seeking disability benefits to submit contemporaneous medical evidence that they were TPD prior to the cutoff date; instead, the Plan required only that players become TPD within the relevant time frame. Id. at 266. The Fourth Circuit found that the evidence supporting plaintiff’s contentions, including the Plan’s own expert opinion that the plaintiff’s brain injuries had worsened over the years, and that serious neurological impairments that were traceable to the plaintiff’s decades-old professional football career, established at least a presumption he was entitled to degenerative benefits, and the Plan administrators did not rely on substantial evidence to contradict this presumption. Id. The Fourth Circuit affirmed the district court’s summary judgment in favor of the plaintiff.
Fifth Circuit
In Ariana M. v. Humana Health Plan of Texas, Inc., 854 F.3d 753 (5th Cir. 2017), the Fifth Circuit affirmed a health plan’s denial of coverage for continued partial hospitalization for mental health treatment. In reaching its decision, the court followed its precedent in Pierre v. Connecticut General Life Insurance Co./Life Insurance Co. of North America, 932 F.2d 1552 (5th Cir. 1991), regarding review of the plan’s factual determinations. Id. at 756–57. In Pierre, the Fifth Circuit did not interpret Firestone to require de novo review of factual determinations and instead found that an abuse of discretion standard of review was appropriate for reviewing a plan administrator’s factual determinations. Applying Pierre, the court determined that the district court did not err by applying abuse of discretion, instead of a de novo standard, to assess the plan’s factual determinations, which is a departure from the majority of other circuits. Id. at 763. Notably, the Texas anti-discretionary clause regulation did not alter the standard of review regarding factual determinations in the course of a benefits review. The court upheld defendant’s determination that plaintiff’s continued partial hospitalization was not medically necessary. Although the court affirmed the district court’s decision, all of the judges who heard the case signed a “special concurrence,” indicated that Pierre should be re-examined. Id. at 762–65. On July 10, 2017, the Fifth Circuit granted rehearing en banc. Ariana M. v. Humana Health Plan of Texas, Inc., No. 16-20174, 2017 WL 3029158 (5th Cir. July 10, 2017).
In Davis v. Aetna Life Ins. Co., 869 F.3d 354(5th Cir. 2017), the Fifth Circuit affirmed the district court’s determination that there was no evidence the insurer’s structural conflict of interest may have influenced its benefits decision and the insurer had reasonably based its decision to terminate long-term disability benefits on its independent review of the treating doctor’s medical records, opinions by two qualified independent peer reviewers, an IME report, an Administrative Law Judge’s (ALJ”) determination that plaintiff was ineligible for SSDI, and surveillance and social media evidence. Plaintiff had alleged disability based on symptoms related to systemic lupus erythematosus. She received disability benefits from April 2010 until March 2014. In 2012, Aetna was informed that an ALJ found that Davis was not entitled to Social Security Disability Insurance benefits. In 2012, surveillance showed Plaintiff “driving to three fast-food restaurants and a pharmacy, turning her body, bending down, leaning forward, reaching into the back seat of her car, carrying a bag over her shoulder, and walking quickly.” Id. at 2. A social media search confirmed plaintiff was a student at a local university (although there was no confirmation regarding whether plaintiff was actually attending class). Social media also revealed that plaintiff and her husband visited several tourist attractions, restaurants, a movie theater, and a bowling alley during July – August 2013. The insurer recognized that plaintiff would likely have good days and bad days; however, it concluded from the entirety of the evidence that plaintiff could work in a sedentary position with occasional limitations when she experienced flares from lupus. Id. at 8. Applying an abuse of discretion standard of review, the district court determined the insurer’s termination of any occupation disability benefits constituted no abuse of discretion. The Fifth Circuit held there was substantial evidence supporting the insurer’s decision and affirmed the district court’s judgment. Id.
Sixth Circuit
In Blount v. United of Omaha Life Ins. Co., 690 F. App’x 908 (6th Cir. 2017), the Sixth Circuit held the denial of long-term disability benefits based on a 24-month “substance abuse” plan limitation was proper. Plaintiff had sought long-term disability benefits on the basis of her treating rheumatologist’s diagnosis of pain, fatigue, and cognitive problems associated with lupus and fibromyalgia. Id. at *908. However, plaintiff’s treating physicians and independent medical experts expressed doubt with these diagnoses, instead attributing plaintiff’s “disabling fatigue and cognitive problems to her ‘massive’ prescription opioid regimen for lupus and fibromyalgia.” Id. Based on all of the medical evidence, the insurer determined plaintiff was disabled due only to the effects of her opioid regimen and explicitly invoked the 24-month substance abuse limitation (i.e., “any condition or disease, regardless of its cause, listed in the most recent edition of the International Classification of Diseases as a mental disorder.”). The district court determined that the insurer did not abuse its discretion applying the 24-month plan limitation, where the insurer did more than “simply note that a claimant’s symptoms” were opioid-related, it reached a reasoned conclusion, “supported by substantial evidence, that the specific pattern of disabling narcotic use meets the definition of abuse under the plan.” Blount v. United of Omaha Life Ins. Co., No. 3:15-CV-00876, 2016 WL 4191725, at *8 (M.D. Tenn. Aug. 8, 2016). The Sixth Circuit declined to issue a full opinion, and instead affirmed the district court’s well-reasoned opinion. Blount, 690 F. App’x at 909.
In Collins v. Unum Life Ins. Co. of Am., 682 F. App’x 381 (6th Cir. 2017), the Sixth Circuit held substantial evidence supported the decision by an ERISA plan administrator to deny accidental dismemberment benefits to a participant based on an exclusion precluding dismemberment from coverage if it was in any way caused by a disease or illness. Plaintiff fell in his employer’s parking lot, fractured his ankle, and approximately one year later plaintiff’s foot was amputated. After his amputation, plaintiff sought benefits under a group insurance policy (the “Plan”), administered by defendant, which provided benefits for accidental dismemberment. The Plan contained an exclusion for “accidental losses caused by, contributed to by, or resulting from ... disease of the body.” Id. at 384. It was well documented that plaintiff had poorly controlled type 2 diabetes mellitus. One of plaintiff’s doctors indicated on a form — only by a circle around the word “no”— that plaintiff’s amputation was not caused by diabetes. Id. at *388. The Plan’s physician reviewer determined that objective evidence overwhelmingly supported diabetes contributed to the participant’s loss. The court found that the Plan’s physician appropriately discredited plaintiff’s physician’s conclusory assertion and affirmed the district court’s judgment upholding defendant’s administrative decision.
Seventh Circuit
In the case of In re Mathias, 867 F.3d 727 (7th Cir. 2017), the Court addressed the issue of whether a forum selection clause in an ERISA plan was barred by ERISA’s venue provision at 29 U.S.C. Section 1132(e)(2). Caterpillar’s ERISA plan documents provided that a lawsuit must be brought in the Central District of Illinois. When plaintiff sued in the Eastern District of Pennsylvania, Caterpillar successfully moved to transfer the case to Illinois. There, the plaintiff moved to transfer back to Pennsylvania and when his motion was denied, he filed a petition for mandamus with the Seventh Circuit. The Court held that ERISA’s venue provision is permissive, not mandatory, and that nothing in the provision prohibits plans from including forum selection clauses. The Court also held that under prevailing Supreme Court authority, forum selection clauses are enforceable generally except in unusual cases. The Seventh Circuit denied the mandamus petition and joined the only other circuit court to address the viability of forum selection clauses in ERISA plans, Smith v. Aegon Cos. Pension Plan, 769 F.3d 922 (6th Cir. 2014).
In Studer v. Katherine Shaw Bethea Hospital, 867 F.3d 721 (7th Cir. 2017), the Court addressed the issue of whether a claim for post-termination vacation pay under the Illinois Wage Payment and Collection Act was preempted by ERISA. The employer sponsored a Paid Days Leave program that was administered in conjunction with a VEBA plan. The VEBA plan was governed by ERISA. When the plaintiff resigned her employment, she had accrued 251.12 hours of leave. Following the terms of the VEBA plan, the employer paid plaintiff her hourly rate for 80 of those hours. It then converted the remaining 171.12 hours into dollars based on the plaintiff’s hourly rate and moved those dollars into her VEBA account. The plaintiff disputed the employer’s moving of that money, claiming that she instead should have been paid directly for those hours. The Seventh Circuit characterized the claim as one focused on the misapplication of benefits that were allegedly due under the terms of the leave policy, which specifically incorporated the VEBA plan. That is exactly the type of claim that ERISA permits a plaintiff to bring under ERISA, 29 U.S.C. Section 1132(a)(1)(B). The Court also held that the state law did not create an independent legal duty apart from ERISA because the employer’s alleged liability extended from an ERISA-governed plan. Thus, the state law claim was completely preempted by ERISA and properly removed to federal court.
In Trujillo v. ABA, 2017 U.S. App. Lexis 17116 (7th Cir. Sept. 5, 2017), the plaintiff sued for relief under ERISA, 29 U.S.C. Sections1132(a)(3) and 1140 arising from his termination as administrator of the American Bar Association Pension Plan. The plaintiff was never a participant in the plan so he sued as a fiduciary of the plan. The Court declined to decide whether the plaintiff’s status as a former fiduciary was sufficient to grant him standing under Section1132(a)(3), noting that other circuits have held that a former fiduciary does not have standing to sue as a fiduciary of an ERISA plan. However, the Court held that the plaintiff was not bringing a lawsuit in his fiduciary capacity because all of the relief he was seeking (reinstatement and back pay) was relief that was geared to make the plaintiff whole, not the plan or any plan participant or beneficiary. The Seventh Circuit also held that as a pro se litigant, the plaintiff could only represent himself and not others and that he would need a lawyer to sue in a fiduciary capacity.
Eighth Circuit
In Jones v. Aetna Life Ins. Co., 856 F.3d 541 (8th Cir. 2017), the plaintiff challenged the denial of her claim for short-term disability benefits under Section 502(a)(1)(B) of ERISA while also asserting a breach of fiduciary duty under Section 502(a)(3). With regard to the breach of fiduciary duty claim, plaintiff argued Aetna used claims examiners with conflicts of interest and denied short-term benefits solely to disqualify long-term disability claims. Id. at 547. Aetna argued the two claims were duplicative – flowing from the same denial of benefits and “improper claims processing.” Id. The Eighth Circuit disagreed, holding plaintiff “asserts different theories of liability.” Id. Allowing both claims to proceed, the Eighth Circuit explained, “Aetna’s alleged liability under (a)(3) flows from the process, not the denial of benefits itself. A plan administrator is not liable under (a)(1)(B) for administering a claims process contrary to its fiduciary obligation to carry out its duties solely for participants and beneficiaries.” Id.
In Dakotas & W. Minnesota Elec. Indus. Health & Welfare Fund by Stainbrook & Christian v. First Agency, Inc., 865 F.3d 1098 (8th Cir. 2017), a dependent of an ERISA plan participant suffered knee injuries during collegiate baseball practice. The injured student was also covered under a student athlete insurance policy issued by First Agency, Inc., as appointee of Guarantee Trust Life Insurance Company (collectively “FA”). The student timely filed claims with both the ERISA plan and FA. “Though it is undisputed his baseball injuries are covered by both policies, both insurers refused to pay. FA claimed that Dakotas must pay first because FA’s policy is ‘excess only.’ Dakotas claimed that, under the plan’s coordination of benefits [] provision, FA's coverage is primary.” Id. at 1101. The plan filed suit under Section 502(a)(3) of ERISA. The Eighth Circuit held that the “declaratory judgment action is an equitable claim seeking remedies typically available in equity and therefore available under Section 502(a)(3). Dakotas’ trustees seek a judicial ruling on an uncertain question critical to proper performance of their fiduciary duties in administering plan assets and paying beneficiary claims—a ruling traditionally available in courts of equity by a bill for instructions.” Id. at 1103. Moreover, “[t]he relief Dakotas seeks is consistent with the plain language of Section 502(a)(3). It is also consistent with the broad purposes of ERISA.” Id.
Ninth Circuit
In Williby v. Aetna Life Ins. Co., 867 F.3d 1129 (9th Cir. 2017), the issue was whether a discretionary authority provision in a self-funded short-term disability plan document was unenforceable because of California’s prohibition of such provisions when they are included in certain insurance policies. The plaintiff worked for Boeing Corporation and was a participant in Boeing’s self-funded short-term disability plan. Aetna Life Insurance Company was the claim administrator for the plan. When Aetna denied plaintiff’s benefit claim, plaintiff sued. The district court refused to apply a deferential review standard on the ground that discretionary authority clauses were prohibited by California law. The Ninth Circuit reversed and remanded. The Ninth Circuit held that the plan was within the scope of the state statutory prohibition because the prohibition was aimed at entities engaged in insurance, not just insurers themselves, citing an earlier 2017 decision in Orzechowski v. Boeing Co. Non-Union Long-Term Disability Plan, Plan No. 625, 856 F.3d 686, 692 (9th Cir. 2017). The Court also held that a self-funded short-term disability plan constituted “insurance” under California law. However, the Court also held that the state law prohibition could not be applied to the self-funded short-term disability plan because ERISA bars state law regulation of self-funded plans even where the state law is a bona fide insurance regulation. 29 U.S.C. Section 1144(b)(2)(B).
In Salyers v. Metropolitan Life Ins. Co., 871 F.3d 934 (9th Cir. 2017), the plaintiff purchased $250,000 in life insurance on her husband through an ERISA plan. The employer withheld premiums for the coverage but neglected to require the employee to submit evidence of insurability which was required under the plan. When the husband died, the insurer, which was unaware until the death that the husband was insured much less the amount, paid $30,000 in life insurance that was allowed without evidence of insurability, but denied the remainder. The Ninth Circuit held that the insurer was liable for the remaining benefit despite the failure to submit evidence of insurability. The Court did so by creating and then relying upon a federal common law of agency whereby the employer’s failure to obtain evidence of insurability constituted a waiver that was applied to the insurer as the principal in the agency relationship. The Court held that the employer-agent partially relinquished a right under the ERISA plan and that the insurer as principal was therefore liable for the full life insurance benefit.
Tenth Circuit
In Pioneer Centres Holding Co. Employee Stock Ownership Plan & Tr. v. Alerus Fin., N.A., 858 F.3d 1324 (10th Cir. 2017), the Pioneer Centres Holding Company Employee Stock Ownership Plan and Trust (the “Plan”) sued Alerus Financial, N.A. (“Alerus”) for breach of fiduciary duty in connection with the failure of a proposed employee stock purchase. The district court granted summary judgment to Alerus after determining evidence of causation did not rise above speculation. The Plan appealed, claiming the district court erred by placing the burden to prove causation on the Plan, rather than shifting the burden to Alerus to disprove causation once the Plan made out its prima facie case. The Tenth Circuit disagreed with the Plan, stating “[w]here the plain language of the statute limits the fiduciary’s liability to losses resulting from a breach of fiduciary duty, there seems little reason to read the statute as requiring the plaintiff to show only that the loss is related to the breach.” Id. at 1337 (emphasis in original). And, “the burden-shifting framework could result in removing an important check on the otherwise sweeping liability of fiduciaries under ERISA.” >Id. “In sum, [the Tenth Circuit saw] no reason to depart from the ordinary default rule that plaintiffs bear the risk of failing to prove their claims. Viewing the plain language, causation cannot fairly be characterized as an affirmative defense or exemption, but is an express element of a claim for breach of fiduciary duty under 29 U.S.C. Section 1109(a).” Id. (internal citations and quotations omitted).
In Blair v. Alcatel-Lucent Long Term Disability Plan, 688 F. App’x 568 (10th Cir. 2017), despite discretion in the Plan documents, plaintiff argued the appropriate standard of review for her denial of long-term disability benefits was de novo because CIGNA did not decide or communicate with her regarding her second appeal. The Tenth Circuit disagreed, stating “ERISA does not demand a second opportunity for appeal, and the Plan does not require one. Therefore, CIGNA was not obliged to, and ultimately did not, allow a second appeal. CIGNA’s solicitous approach in initially considering her second appeal does not change our standard of review of its timely decision on her first appeal, which we review for abuse of discretion.” Id. at 572-573 (internal citations omitted). In short, “ERISA requires plans to provide one appeal and plan administrators must timely decide those appeals.” Id., citing Hancock v. Metro. Life Ins. Co., 590 F.3d 1141, 1154 (10th Cir. 2009).
Eleventh Circuit
In Webb v. Liberty Mut. Ins. Co., 692 F. App’x 603 (11th Cir. 2017), the Eleventh Circuit considered the reasonableness of a contractual limitations period in an ERISA long-term disability plan. The Eleventh Circuit ultimately remanded the case to the district court to determine a fact question regarding the participant’s belief as to whether the administrative review process was complete. In so doing, the Eleventh Circuit restated the factors for determining if a contractual limitations period is reasonable, which include: “(1) whether there was any subterfuge to prevent lawsuits; (2) whether the limitations period was commensurate with other provisions in the plan that are designed to process claims with dispatch; and (3) whether an ERISA-required internal appeals process was completed.” Id. at *3 (internal quotations omitted). With regard to the second factor, the plaintiff believed the administrative review process was incomplete based on the defendant’s statement, and if an objectively reasonable person in her place would have believed as much, the limitations period in this case would be unreasonable because plaintiff could not bring suit until the administrative review process finished. Id.
In Prelutsky v. Greater Georgia Life Ins. Co., 692 F.App’x 969 (11th Cir. 2017), the Eleventh Circuit considered whether a participant’s claim for long-term disability benefits was barred by the plan’s intoxication exclusion. Where the administrator reviewed the complete medical-record of the participant’s resulting brain injury, which contained undisputed toxicological evidence that, at time he fell, his blood alcohol content was .281%, which was diagnosed as acute alcohol intoxication, an independent forensic physician confirmed that participant’s intoxication likely played causal role in his fall, the participant was otherwise a perfectly healthy middle-aged man, and there were no witnesses to the fall, the decision was not arbitrary and capricious. Id. at *6.