Justia U.S. 5th Circuit Court of Appeals Opinion Summaries

Articles Posted in ERISA
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BP Corporation North America Inc. (“BP America”) a Defendant-Appellee in this action, acquired Standard Oil of Ohio (“Sohio). BP America converted the Sohio Plan into a new plan called the BP America Retirement Plan (the “ARP”). The ARP was also a defined benefit plan that retained the formula used by the Sohio Plan to calculate its members’ pension distributions. BP America converted the ARP into the BP Retirement Accumulation Plan (the “RAP,” the conversion from the ARP to the RAP as the “Conversion,” and the date of the Conversion as the “Conversion Date”), the other Defendant-Appellee in this action. Plaintiffs-Appellees, two Sohio Legacy Employees, (the “Guenther Plaintiffs”) filed a class action complaint against the RAP and BP America.   Four years after the Guenther Plaintiffs filed their original complaint, Movant-Appellant, along with 276 other individuals (the “Press Plaintiffs”) moved to intervene in the Guenther Action “for the purpose of objecting” to the magistrate judge’s recommendation. Press Plaintiffs contend that the certified class in the Guenther Action inadequately represents their interests, and therefore, they have a right to intervene in this case.   The Fifth Circuit affirmed the district court’s ruling denying the intervention. The court held that the Press Plaintiffs cannot demonstrate that their interests diverge from those of the Guenther Plaintiffs in any meaningful way. Further, the Press Plaintiffs did not identify a unique interest of their own, they are unable to specify how a determination in the Guenther Action could have a future detrimental preclusive effect. The court wrote it is satisfied that the Press Plaintiffs will be adequately represented. View "Guenther v. BP Retr Accumulation" on Justia Law

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Plaintiff discovered she had a brain tumor and underwent radiation. Plaintiff was later hired by Situs Group. Situs maintained a disability plan covered by the Employment Retirement Income Security Act (“ERISA”) that provided long-term disability benefits to eligible current and former employees. The plan’s insurance was provided by Dearborn National Life Insurance., Plaintiff attended a benefits meeting led by Situs’s Benefits Coordinator, where she was told participants could receive benefits regardless of pre-existing conditions and that they would not be questioned about their pre-existing conditions when the company was determining eligibility.Plaintiff’s employer denied her claim for long-term disability benefits under ERISA. The claim was denied because of the application of a preexisting condition exclusion in the insurance contract. Plaintiff raised several points of error on appeal, but the Fifth Circuit affirmed the district court’s ruling.The court agreed with the district court that Dearborn substantially complied with ERISA procedures and was entitled to extend the deadline to respond to Plaintiff’s claim. Further, there is no question that Defendants waived their right to assert the pre-existing condition exclusion as a defense to Plaintiff’s claim for the initial, shorter-term benefits. That waiver does not compel the conclusion that Defendants also intended to waive their right to enforce the exclusion when it came to Plaintiff’s application for LTD benefits. Finally, here neither the magistrate judge nor the district court appeared to consider itself limited to certain categories of evidence. The magistrate judge specifically noted that certain evidence would be relevant to her estoppel or waiver claims but need not be in the administrative record itself. View "Bunner v. Dearborn Natl Life" on Justia Law

Posted in: ERISA
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Lereta maintained an ERISA-governed benefits plan, subject to the Employee Retirement Income Security Act (ERISA) that provided short-term disability (STD) and long-term disability (LTD) to its employees, including Newsom. Reliance issued the policies that funded these benefits and served as the benefits claims administrator. Newsom filed suit following Reliance’s determination that he was ineligible for LTD benefits.The district judge entered an order in favor of Newsom, awarding him LTD benefits. The Fifth Circuit affirmed as to Newsom’s eligibility for LTD benefits and alleged date of disability but vacated as to Newsom’s entitlement to LTD benefits. The court remanded with instructions for the district court to remand Newsom’s claim to the administrator for further proceedings. The district court did not err by interpreting the term “full time” and its reference to a “regular work week” to mean the “scheduled workweek” set by Lereta for Newsom. Although that factual record contains medical records Newsom submitted during Reliance’s evaluation of his claim, the merits evidence is at best incomplete and undermines the district court’s benefits determination; the court’s benefits determination does not fully square with the record. View "Newsom v. Reliance Stnrd Life Ins" on Justia Law

Posted in: ERISA, Insurance Law
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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

Posted in: ERISA
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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

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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

Posted in: ERISA, Legal Ethics
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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

Posted in: ERISA
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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

Posted in: ERISA
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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

Posted in: ERISA, Insurance Law
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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

Posted in: ERISA