Justia U.S. D.C. Circuit Court of Appeals Opinion SummariesArticles Posted in ERISA
Trustees of the IAM National Pension Fund v. Ohio Magnetics, Inc.
This case involved the interpretation of two provisions of the Multiemployer Pension Plan Amendments Act (“MPPAA”), part of the Employee Retirement Income Security Act of 1974 (“ERISA”). The appellants, M&K Employee Solutions, LLC and Ohio Magnetics, Inc., were employers that had withdrawn from the IAM National Pension Fund, a multiemployer pension plan (“MPP”). The issues before the United States Court of Appeals for the District of Columbia Circuit were: (1) whether the Fund’s actuary could set actuarial assumptions for calculating the employers' withdrawal liability after the measurement date based on information available as of the measurement date; and (2) for M&K, whether it was entitled to the "free-look" exception which allows an employer to withdraw from a plan within a specified period after joining without incurring withdrawal liability.On the first issue, the court affirmed the district court's rulings that the actuary could set actuarial assumptions after the measurement date, as long as the assumptions were based on the information available as of that date. The court held that this interpretation aligned with the best estimate of the plan’s anticipated experience as of the measurement date and was consistent with the policy of the MPPAA to protect multiemployer pension plans and their beneficiaries.On the second issue, the court held that M&K was entitled to the free-look exception. The court found that M&K had partially withdrawn from the Fund during the 2017 plan year, had an obligation of fewer than five years at the time of its partial withdrawal, and therefore met the requirements of the free-look exception. View "Trustees of the IAM National Pension Fund v. Ohio Magnetics, Inc." on Justia Law
Fisher v. Pension Benefit Guaranty Corp.
The DC Circuit affirmed the district court's grant of summary judgment to PBGC, concluding that 29 C.F.R. 4044.4(b) is valid and that the PBGC Appeals Board reasonably applied section 4044.4(b) to deny appellant's lumpsum request. The court also concluded that, because fiduciaries must act in accordance with the terms of plan documents only "insofar as such documents and instruments are consistent with the provisions of" the Employee Retirement Income Security Act of 1974 (ERISA), Penn Traffic fulfilled its fiduciary duties by denying appellant's request in compliance with section 4044.4(b). Therefore, the court need not address appellant's contentions that Penn Traffic's handling of his lumpsum request was inconsistent with the Plan's terms. View "Fisher v. Pension Benefit Guaranty Corp." on Justia Law
Wilcox v. Georgetown University
Participants in Georgetown University retirement plans sued the University and individual plan fiduciaries, seeking to bring individual and representative class action claims for breach of fiduciary duty under the Employee Retirement Income Security Act (ERISA) 29 U.S.C. 1001–1461. They alleged that the plans paid excessive fees for record-keeping services and included investment options that consistently underperformed their benchmarks. In January 2019, the district court dismissed the complaint without prejudice, citing Article III standing as to some aspects of plan management, such as the inclusion of investment options neither plaintiff had selected. Regarding the duty of prudence, the court found that the excessive recordkeeping fees allegations provided no factual support for the assertion that the plans should pay only $35/year per participant. In May, the court denied as untimely their motion for leave to file an amended complaint.The D.C. Circuit vacated. Dismissal of a complaint without prejudice is generally not a final appealable order. Exceptions that apply where the record clearly indicates that the district court has separated itself from the case do not apply to this case. The January Order did not enter a final, appealable judgment; the district court erred when considering the motion to amend the complaint in refusing to apply the Rule 15(a)(2) standard, rather than the more restrictive standards under Rules 59(e) and 60(b). View "Wilcox v. Georgetown University" on Justia Law
Lewis v. Pension Benefit Guaranty Corp.
In 2005, Delta Airlines filed for bankruptcy and stopped contributing to its pilots' pension plan. Delta and the Pension Benefit Guaranty Corporation (PBGC) terminated that Plan, which had insufficient assets to support promised benefit payments, Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1301-1461. Under such circumstances, a trustee collects the remaining assets and makes promised payments according to statutory priorities. PBGC provides additional money from its own funds to make up the difference between those payments and guaranteed benefits. PBGC, the Plan's trustee, determined the Plan had a deficit of over $2.5 billion, almost $800 million of which PBGC guaranteed, and paid estimated benefits. It took six years to finalize benefit determinations. After administrative appeals by the pilots, nearly 1,700 beneficiaries sued to further challenge those determinations, citing the Administrative Procedure Act, 5 U.S.C. 706, and seeking disgorgement, arguing that the Corporation breached its fiduciary duty and controlled Plan assets for a longer period to collect “massive investment returns” rather than timely paying the pilots. The D.C. Circuit reversed the denial of the Corporation’s motion to dismiss the breach of fiduciary duty claim. Recovering the post-termination increase in the value of plan assets is not an available remedy; 29 U.S.C. 1344(c) prevents disgorgement, providing that “[a]ny increase or decrease in the value of the assets of a single-employer plan occurring after the date on which the plan is terminated shall be credited to, or suffered by, the [C]orporation.” View "Lewis v. Pension Benefit Guaranty Corp." on Justia Law
Marcin v. Reliance Standard Life Insurance Co.
Reliance challenged the district court's award of disability benefits to plaintiff under a plan pursuant to the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001 et seq., and the amount of benefits owed. The DC Circuit affirmed, holding that plaintiff proved partial disability. In this case, the conflict of interest factor in the standard of review, as well as plaintiff's medical record, lack of full time work, and release to return to work only "as tolerated" convinced the court that she established partial disability. The court explained that, according to the express terms of the Plan, partial disability was equivalent to total disability within the relevant period. View "Marcin v. Reliance Standard Life Insurance Co." on Justia Law
Coburn v. Evercore Trust Company, N.A.
Plaintiff, on behalf of herself and others similarly situated, filed suit against Evercore under the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. 1109(a), 1132(a)(2)-(3). Plaintiff is a former J.C. Penney employee and investor in a J.C. Penney employee stock ownership plan (ESOP) managed by Evercore. Plaintiff claims that Evercore breached its fiduciary duties of prudence and loyalty when it failed to take preventative action as the value of J.C. Penney common stock tumbled between 2012 and 2013, thereby causing significant losses. Applying Fifth Third Bancorp v. Dudenhoeffer, the court concluded that plaintiff's complaint was properly dismissed because she failed to allege additional allegations of "special circumstances." In this case plaintiff failed to allege that the market on which J.C. Penney stock traded was inefficient. Accordingly, the court affirmed the judgment. View "Coburn v. Evercore Trust Company, N.A." on Justia Law
Foster v. Sedgwick Claims Management Services, Inc.
Kelly Foster filed suit against Appellees under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1132(a), to enforce her rights under short-term and long-term disability benefit plans that had been adopted by her employer, Sun Trust Bank. The district court granted summary judgment to Appellees and dismissed Foster's complaint. The district court then denied Foster's motion for reconsideration. The court affirmed the district court's finding that the short-term disability plan is an ERISA-exempt “payroll practice” under Department of Labor regulations; held that the district court appropriately applied a deferential standard of review to the administrator’s denial of benefits under the long-term disability plan because the terms of the plan unambiguously granted the administrator, and the administrator alone, the power to construe critical terms of the plan and to decide an employee’s eligibility for benefits; and held that the district court did not abuse its discretion in denying Foster's motion for reconsideration. View "Foster v. Sedgwick Claims Management Services, Inc." on Justia Law
Deppenbrook v. Pension Benefit Guaranty Corp.
Plaintiff filed suit against PBGC, alleging claims under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001 et seq., and seeking to correct PBGC's benefit determinations. The court concluded that PBGC properly interpreted the provisions of ERISA and did not act arbitrarily or capriciously in declining to provide shutdown benefits to plaintiff; PBGC properly interpreted ERISA and did not act arbitrarily or capriciously in failing to insure plaintiff's individual account; and, assuming arguendo that PBGC in fact amended the pension plan, plaintiff cannot identify a statutory provision that bars PBGC from doing so. Accordingly, the court affirmed the district court's grant of summary judgment to PBGC. View "Deppenbrook v. Pension Benefit Guaranty Corp." on Justia Law
Vanderkam v. Vanderkam
John and Melissa married in 1984. John enrolled in his employer’s retirement plan and designated Melissa as the beneficiary of a qualified joint and survivor annuity. John retired in 1994. The survivor annuity irrevocably vested in Melissa; John began receiving benefits. In2002, they divorced, agreeing to a decree awarding John all “benefits existing by reason of [John’s] past, present, or future employment.” John remarried and sought to designate his new wife as the survivor annuity beneficiary. The plan advised John that this designation would be permissible if done by qualified domestic relations order (QDRO) that would not require the plan to increase benefits beyond actuarial estimates of John’s and Melissa’s life expectancies, 29 U.S.C. 1056(d)(3)(D). On John’s motion, a Texas court entered a purported QDRO divesting Melissa of all ownership interests in the survivor annuity. The employer terminated its pension plan. Pension Benefit Guaranty Corporation (PBGC) became the plan’s statutory trustee and determined that the supposed QDRO was invalid because it would require “a form of benefit, or [an] option, not otherwise provided under the plan” and because, unless waived in accordance with statutory procedures within 90 days, a spouse’s right to the survivor annuity irrevocably vests on the annuity start date. The district court upheld the determination and found John’s contract and unjust enrichment claims against Melissa preempted. The D.C. Circuit affirmed. View "Vanderkam v. Vanderkam" on Justia Law
Holland v. Bibeau Construction Co.
Bibeau appealed the district court's grant of summary judgment and order directing it, as a related person to a disabled miner's former employer, to pay health insurance premiums, interest, and liquidated damages to the United Mine Workers of America 1992 Benefit Plan. The court concluded that Bibeau's laches claim was precluded under Petrella v. Metro-Goldwyn-Mayer, Inc. because each premium installment gives rise to a separate cause of action for legal relief for which Congress has enacted a statute of limitations to govern timeliness. Further, under the Coal Industry Retiree Health Benefit Act of 1992, 26 U.S.C. 9701-9722, which incorporates the Employee Retirement Income Security Act's (ERISA), 29 U.S.C. 1451(a)(1), enforcement scheme, the district court did not err in awarding interest and liquidated damages. Accordingly, the court affirmed the judgment. View "Holland v. Bibeau Construction Co." on Justia Law