Justia U.S. 1st Circuit Court of Appeals Opinion SummariesArticles Posted in ERISA
Brotherston v. Putnam Investments, LLC
The First Circuit vacated the judgment of the district court in part ruling in favor of Putnam Investments, LLC and other fiduciaries of Putnam’s defined-contribution 401(k) retirement plan on Plaintiffs’ lawsuit claiming that Defendants breached fiduciary duties to the plan's participants, clarifying several principles for the district court that should guide its subsequent rulings on remand.Plaintiffs, two former Putnam employees who participated in the Plan, brought this lawsuit on behalf of a now-certified class of other participants in the Plan and on behalf of the Plan itself pursuant to the civil enforcement provision of ERISA, see 29 U.S.C. 1132(a)(2), arguing that Defendants offered a range of mutual investments, including Putnam’s mutual funds, without regard to whether such funds were prudent investment options and that Defendants treated Plan participants worse than other investors in Putnam mutual funds. The district court ruled in favor of Defendants. The First Circuit (1) affirmed the district court’s dismissal of Plaintiffs’ prohibited transaction claim under 1106(a)(1)(C), breach of loyalty claim, and disgorgement claim; (2) vacated the court’s dismissal of Plaintiffs’ prohibited transaction claim under 1106(b)(3) and the finding that Plaintiffs failed as a matter of law to show loss; and (3) remanded for further proceedings. View "Brotherston v. Putnam Investments, LLC" on Justia Law
Doe v. Harvard Pilgrim Health Care, Inc.
The First Circuit reversed in part, vacated in part, and remanded for further proceedings the district court’s denial of Plaintiff’s challenge of Harvard Pilgrim Health Care’s (HPHC) denial of coverage for the cost of Plaintiff’s uncovered care at a mental health residential treatment facility, holding that the administrative record upon which the district court based its findings should have been supplemented.HPHC, Plaintiff’s insurer, deemed a portion of the time Plaintiff spent at the residential facility not medically necessary under the health care benefits plan established by the employer of Plaintiff’s parent and therefore denied coverage for that portion of the treatment. Plaintiff brought suit under ERISA, 29 U.S.C. 1001-1461. The district court affirmed on de novo review, concluding that continued residential treatment was not medically necessary for Plaintiff. The First Circuit vacated the district court’s order granting summary judgment for HPHC and remanded for further proceedings, holding (1) when a district court examines the denial of ERISA benefits de novo, the court’s factual findings are reviewed only for clear error; and (2) such a deferential review cannot properly be conducted in this case on the administrative record. View "Doe v. Harvard Pilgrim Health Care, Inc." on Justia Law
Barchock v. CVS Health Corp.
The First Circuit affirmed the district court’s denial of Plaintiffs’ complaint alleging violations of the fiduciary duty of prudence under the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. 1001-1461, by the fiduciaries of an employer-sponsored retirement plan for failure to state a claim.Plaintiffs, three individuals who participated in an ERISA employee retirement plan that was sponsored by their employer, CVS Health Corporation (CVS), and administered by the Benefits Plan Committee of CVS (the Committee), alleged that CVS, the Committee, and Galliard Capital Management, Inc., which managed the fund, owed Plaintiffs a fiduciary duty of prudence under ERISA with respect to the plan’s investments in the fund and that each of the defendants breached that duty. The district court granted Defendants’ motion to dismiss the complaint for failure to state a claim under ERISA. The First Circuit affirmed, holding that Plaintiffs’ complaint failed to state a plausible claim against any of the defendants. View "Barchock v. CVS Health Corp." on Justia Law
Ellis v. Fidelity Management Trust Co.
In this certified class action brought under the Employee Retirement Income Security Act of 1974 (ERISA), the district court correctly concluded that Plaintiffs failed to adduce evidence necessary to proceed to trial.Plaintiffs sued Fidelity Management Trust Company, the fiduciary for a fund in which Plaintiffs had invested, arguing that Fidelity breached its duties of loyalty and prudence in managing the fund. The district court granted summary judgment for Fidelity, finding that Plaintiffs’ arguments lacked the evidentiary support needed to survive summary judgment. The First Circuit affirmed, holding (1) the district court employed the correct legal test in its evaluation of the evidence; and (2) the district court correctly held that Plaintiffs had presented insufficient evidence to proceed to trial on their claims of disloyalty and imprudence. View "Ellis v. Fidelity Management Trust Co." on Justia Law
Groden v. N&D Transportation Co., Inc.
The district court erred in refusing to vacate its dismissal of a pension fund’s lawsuit against an employer’s alleged alter egos. In the lawsuit, the fund sought $1.2 million in unpaid withdrawal liability that was previously assessed against the employer in a default judgment. The district court dismissed the case, concluding that subject matter jurisdiction did not exist under the Employee Retirement Income Security Act (ERISA). The court subsequently denied Appellant’s motion for post-judgment relief. The First Circuit vacated the court’s post-judgment ruling and remanded the case for further proceedings, holding that the fund’s alter ego claims were anchored in ERISA, and thus the fund had established federal subject matter jurisdiction. View "Groden v. N&D Transportation Co., Inc." on Justia Law
Doe v. Standard Insurance Co.
Plaintiff worked at a Maine law firm for more than twenty-five years and, for many years, was an equity partner. In 2012, Plaintiff filed a long term disability (LTD) claim with Defendant Standard Insurance Company, the claim administrator and insurer of the employee welfare benefit plan offered by Plaintiff’s law firm to its employees. The plan was insured by an LTD policy, also issued by Defendant and which covered Plaintiff. Defendant told Plaintiff that it would approve her claim and that it would use January 28, 2012 as the disability onset date. This appeal concerned only what disability onset year should be used to calculate Plaintiff’s monthly disability amount, Plaintiff arguing that the onset date was on November 2011. The district court entered judgment for Defendant. The First Circuit reversed, holding that Defendant’s decision to use the 2012 onset date was arbitrary and capricious. Remanded to the district court with direction to order Defendant to award Plaintiff retroactive benefits based on a disability onset date of no later than 2011. View "Doe v. Standard Insurance Co." on Justia Law
Stephanie C. v. Blue Cross Blue Shield of Massachusetts HMO Blue, Inc.
Plaintiff brought this case pursuant to the Employee Retirement Income Security Act (ERISA), seeking reimbursement for certain expenses connected with the treatment of her teenage son. The plan administrator, Blue Cross Blue Shield of Massachusetts HMO Blue, Inc. (BCBS) denied the portions of Plaintiff’s claim that were in dispute in this case. The district court upheld BCBS’s action. The First Circuit affirmed, holding that, applying the plain language of the ERISA plan, the clear weight of the evidence dictated a finding that the disputed charges were not medically necessary, as defined in the plan, and therefore were not covered. View "Stephanie C. v. Blue Cross Blue Shield of Massachusetts HMO Blue, Inc." on Justia Law
Rodriguez-Lopez v. Triple-S Vida, Inc.
On her last day of work with Mova Pharmaceutical Corporation, Nilda Rodriguez-Lopez (Rodriguez) began experiencing symptoms. Rodriguez was diagnosed with several physical and mental conditions and filed a claim for long-term disability (LTD) benefits under Mova’s employee welfare benefits plan (the Plan). Triple-S Vida, Inc. denied Rodriguez’s application for LTD benefits, finding she did not meet the Plan’s definition of disabled. After she exhausted her administrative remedies, Rodriguez filed suit. The district court granted Triple-S’s motion for summary judgment, concluding that Triple-S’s denial of LTD benefits was neither arbitrary nor capricious. Rodriguez appealed, claiming that the Plan did not reflect a clear grant of discretionary authority to Defendant, and therefore, Triple-S’s determination to deny her LTD benefits was subject to the de novo standard of review. The First Circuit vacated the judgment, holding that the Plan did not confer discretionary authority upon Triple-S, and therefore, de novo review applied. Remanded. View "Rodriguez-Lopez v. Triple-S Vida, Inc." on Justia Law
Prime Healthcare Services – Landmark LLC v. United Nurses & Allied Professionals, Local 5067
This appeal concerned a dispute between employees represented by a Union and their successor employer. The parties agreed to arbitrate this dispute regarding change in the terms of pension provision in a collective bargaining agreement. The district court refused to compel arbitration on the grounds that ERISA preempted the Union’s claims, and this, in turn, presented an issue of arbitrability properly decided by a judge, not an arbitrator. The First Circuit vacated the order of the district court and remanded with instructions to grant the Union’s motion to compel arbitration, holding that the issue of ERISA preemption in this case was not an issue of arbitrability but, rather, one that was squarely for the arbitrator to decide. View "Prime Healthcare Services - Landmark LLC v. United Nurses & Allied Professionals, Local 5067" on Justia Law
Vendura v. Boxer
In 1993, Vendura was hired by TRW Inc. and became a participant in the TRW Salaried Pension Plan. In 2002, Northrop Grumman Corp. acquired TRW and renamed the company (herein referred to as NGSMC). After NGSMC attempted to terminate Vendura’s employment Vendura challenged the attempt, and Vendura and NGSMSC signed a settlement agreement providing that Vendura would remain an employee of NGSMSC under certain conditions. In 2013, Vendura filed a claim for pension benefits to the Administrative Committee for the NGSMSC Plan, arguing that he was entitled to twenty years of benefit service under the settlement agreement. The Administrative Committee informed Vendura that he was eligible for a pension reflecting only twelve years of service. Vendura filed an eight-count complaint against Defendants, claiming, inter alia, a violation of ERISA. The district court granted summary judgment for Defendants. At issue on appeal concerned the number of “years of benefit service” that should be credited to Vendura in calculating his pension benefits under his pension plan. The First Circuit granted summary judgment to Defendants, holding that the Administrative Committee properly calculated Vendura’s pension benefits. View "Vendura v. Boxer" on Justia Law