Justia U.S. 5th Circuit Court of Appeals Opinion SummariesArticles Posted in ERISA
Ortiz v. American Airlines, Inc.
Plaintiffs filed suit, on behalf of themselves and others similarly situated, alleging that defendants breached their fiduciary duties under the Employee Retirement Income Security Act of 1974 (ERISA). Plaintiffs asserted that AA and the PAAC breached their fiduciary duties of loyalty and prudence under 29 U.S.C. 1104(a)(1)(A)–(B) by failing to remove the FCU Option from the Plan (Count I); contended that FCU breached its fiduciary duty of loyalty under 29 U.S.C. 1106(b)(1) by dealing with plan assets held by the FCU Option for its own benefit (Count II); and averred that AA and the PAAC engaged in a "prohibited transaction" under 29 U.S.C. 106(a)(1) by offering the FCU Option. The district court ultimately granted summary judgment to defendants and denied approval of the settlement.The Fifth Circuit concluded that the district court correctly determined that plaintiffs lacked standing as to Count I. The court also concluded that the district court erred in concluding that plaintiffs had standing with respect to their claim against FCU. The court explained that it is a settled rule that, in reviewing the decision of a lower court, it must be affirmed if the result is correct although the lower court relied upon a wrong ground or gave a wrong reason. Given the court lacked jurisdiction over these claims, the court did not reach the parties' arguments as to the merits. Finally, the court concluded that plaintiffs failed to demonstrate that the district court abused its discretion in denying approval of the settlement. Accordingly, the court affirmed in part, reversed part, and vacated in part. The court remanded with instructions to dismiss plaintiffs' claim against FCU. View "Ortiz v. American Airlines, Inc." on Justia Law
Atkins v. CB&I, LLC
Plaintiffs, five former employees of CB&I who worked as laborers on a construction project in Louisiana, quit before the project ended and thus made them ineligible to receive the Project Completion Incentive under the term of that plan. Plaintiffs filed suit in state court seeking the bonus for the period they did work, arguing that making such employees ineligible for bonuses amounts to an illegal wage forfeiture agreement under the Louisiana Wage Payment Act. LA. STAT.ANN. 23:631, 23:632, 23:634. After removal to federal court, the district court concluded that the incentive program was an Employee Retirement Income Security Act (ERISA) plan because it required ongoing discretion and administration in determining whether a qualifying termination took place.The Fifth Circuit concluded that the employee benefit at issue—a bonus for completing the project—is not an employee benefit plan under ERISA. The court explained that the plan involves a single and simple payment; determining eligibility might require the exercise of some discretion, but not much; and the plan lacks the complexity and longevity that result in the type of "ongoing administrative scheme" ERISA covers. Therefore, there is no federal jurisdiction over this action. The court vacated and remanded for the case to be returned to state court. View "Atkins v. CB&I, LLC" on Justia Law
Katherine P. v. Humana Health Plan, Inc.
The Fifth Circuit denied plaintiff's motion for attorneys' fees under the Employee Retirement Income Security Act. The court held that 29 U.S.C. 1132(g)(1) does not provide unfettered discretion to courts to award fees. The court explained that a fees claimant whose only victory was an interlocutory ruling by the Court of Appeals that his complaint should not have been dismissed for failure to state a claim has not received any relief on the merits. In this case, plaintiff persuaded the court to reverse the district court's summary judgment ruling in favor of Humana. If plaintiff achieves some success on the merits on remand, she may then ask for fees. View "Katherine P. v. Humana Health Plan, Inc." on Justia Law
Schweitzer v. Investment Committee of the Phillips 66 Savings Plan
Plaintiffs filed a putative class action against the Investment Committee of the Phillips 66's retirement plan for breach of fiduciary duties under the Employee Retirement Income Security Act (ERISA).The Fifth Circuit rejected plaintiffs' contention that defendants breached their duty to diversify under section 1104(a)(1)(C) of ERISA and their duty of prudence under section 1104(a)(1)(B) by failing to consider reducing their holdings in the ConocoPhillips Funds. Although plaintiffs have plausibly alleged that the ConocoPhillips Funds, by its resulting concentration of investment, became an imprudent investment with the spinoff, the court held that it does not follow that defendants were obligated to force plan participants to divest from the funds. Furthermore, by closing the ConocoPhillips Funds to new investments immediately after the spin-off, defendants also ensured that they were not offering participants an imprudent investment option. Finally, the court rejected plaintiffs' contention that the district court erred in dismissing their claim that defendants failed to comply with their duty "to follow a regular, appropriate, systematic procedure to evaluate the ConocoPhillips Funds as investments in the Plan." Therefore, the court affirmed the district court's grant of defendants' motion to dismiss for failure to state a claim. View "Schweitzer v. Investment Committee of the Phillips 66 Savings Plan" on Justia Law
Katherine P. v. Humana Health Plan, Inc.
This dispute arose from Humana's denial of coverage for plaintiff's hospital stay as not "medically necessary" for treatment of an eating disorder. The Fifth Circuit reviewed Employee Retirement Income Security Act (ERISA) claims such as this one under the framework set forth in Ariana M. v. Humana Health Plan of Texas, Inc., 884 F.3d 246 (5th Cir. 2018) (en banc). The court limited its review of the coverage decision to the administrative record and applied de novo review. The court held that there is a genuine dispute of material fact regarding whether plaintiff met the Mihalik Criteria (ED.PM.4.2 sub-criteria) which precluded summary judgment. Accordingly, the court vacated and remanded for further proceedings. View "Katherine P. v. Humana Health Plan, Inc." on Justia Law
North Cypress Medical Center Operating Co. v. Cigna Healthcare
The Fifth Circuit affirmed the district court's adverse judgment against plaintiffs on Employee Retirement Income Security Act (ERISA) claims assigned by Cigna-insured patients. The court held that the law of the case did not require the district court on remand to determine the legal correctness of Cigna's policy interpretation, and under Connecticut General Life Insurance Co. v. Humble Surgical Hospital, L.L.C., 878 F.3d 478, 485 (5th Cir. 2017), a court need not reach legal correctness if the insurer's determination was not an abuse of discretion. Furthermore, Humble moots consideration of the conflicts and inferences of bad faith that plaintiffs assert against Cigna.In this case, the district court correctly applied this court's previous decision in the instant controversy as well as Humble, and thus plaintiffs' exhaustion argument was moot. Plaintiffs' procedural challenge to Cigna's review failed for lack of substantiating evidence, which left the damages issue moot. Finally, plaintiffs failed to establish any right to attorney's fees. View "North Cypress Medical Center Operating Co. v. Cigna Healthcare" on Justia Law
Dialysis Newco, Inc. v. Community Health Systems Group Health Plan
In this Employee Retirement Income Security Act (ERISA) contract dispute, the district court determined that the provider had standing to bring this lawsuit because an anti-assignment provision in the plan was ambiguous or, in the alternative, because the anti-assignment provision was rendered unenforceable by a Tennessee statute.The Fifth Circuit held that the plan's anti-assignment clause unambiguously prohibits the beneficiary from assigning his or her right to sue under the plan to a third-party provider. The court also held that the Tennessee statute, Tenn. Code Ann. 56-7-120(a) (2012), was preempted by ERISA. Accordingly, the court reversed the district court's judgment on the issue of whether plaintiff had standing to bring this lawsuit; vacated the district court's subsequent judgments; and rendered judgment that the case shall be dismissed based on lack of jurisdiction. View "Dialysis Newco, Inc. v. Community Health Systems Group Health Plan" on Justia Law
Faciane v. Sun Life Assurance Co.
The Fifth Circuit affirmed the district court's grant of summary judgment to Sun Life in an action brought by plaintiff, a beneficiary of a long-term disability plan governed by the Employee Retirement Income Security Act of 1974 (ERISA) and administered by Sun Life, alleging that Sun Life had miscalculated his benefits since 2008. The district court agreed with Sun Life that the contractual limitations period for plaintiff's claim had long since passed.The court affirmed the district court's conclusion that no genuine issues of material fact exist as to plaintiff's receipt of the March 2008 letter and that the letter contained enough information for plaintiff's miscalculation claim to accrue. Furthermore, Withrow v. Halsey, 655 F.3d 1032 (9th Cir. 2011), in which the Ninth Circuit ruled that an ERISA miscalculation claim was timely despite a gap of many years between the plan and beneficiary's initial correspondence and the beneficiary's suit, did not help plaintiff and the district court did not abuse its discretion by denying the motion. View "Faciane v. Sun Life Assurance Co." on Justia Law
Nichols v. Reliance Standard Life Insurance Co.
The Fifth Circuit reversed the district court's judgment granting plaintiff past and future long term disability (LTD) benefits and rendered judgment for Reliance. After plaintiff stopped work for a chicken processing plant, she sought LTD benefits under a policy governed by the Employee Retirement Income Security Act (ERISA).The court held that Reliance's contention that its decision that working in cold areas was not a material duty of plaintiff's regular occupation was supported by substantial evidence. The court held that precedent did not require that an administrator consider each of a claimant's job duties to determine her regular occupation. In any event, Reliance's classification was easily based on substantial evidence. View "Nichols v. Reliance Standard Life Insurance Co." on Justia Law
Miletello v. R M R Mechanical, Inc.
This case arose from a dispute between decedent Gerald Miletello's ex-wife Sandra and widow Pam about who was entitled to the funds in Gerald's 401(k) retirement account. The Fifth Circuit affirmed the district court's judgment that Sandra was entitled to $500,000 of the 401(k) balance because she had timely received a qualified domestic relations order (QDRO). The court explained that Congress has modified the Employee Retirement Income Security Act (ERISA) to make clear that a QDRO will not fail solely because of the time at which it was issued. Rather, the QDRO provisions merely prevent her from enforcing her interest until the QDRO is obtained. View "Miletello v. R M R Mechanical, Inc." on Justia Law