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

The Secretary filed suit alleging that defendants breached their fiduciary duties under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001 et seq., when acting as trustees for an Employee Stock Ownership Plan (ESOP). In a three year period, BAI's owner Herbert C. Bruister sold 100% of his BAI shares to BAI's employees through a series of transactions. Two plan participants, Rader and Sealy, filed suit raising generally the same claims as the Secretary and seeking relief on behalf of the ESOP as a whole. The court concluded that Sealy has standing to sue on behalf of the ESOP; the district court applied the law correctly and did not clearly err in finding that Bruister was a fiduciary of the ESOP; defendants breached the duties of loyalty and prudence in their conduct with respect to the stock sales and engaged in prohibited transactions; the district court did not abuse its discretion by denying rescission of the BAI stock sales but granting equitable restitution in the amount the ESOP overpaid; the district court did not clearly err in holding BFLLC jointly and severally liable with the other defendants; the district court’s award and calculation of prejudgment interest were not an abuse of discretion; under the totality of circumstances, the district court did not abuse its discretion in barring defendants from serving as ERISA fiduciaries in the future; and, to alleviate any misconception and avert double recovery, the court modified the concurrent judgments in each consolidated case into a single judgment that disposes of them together. Accordingly, the court affirmed the judgment, but modified its concurrent judgments. View "Perez v. Bruister" on Justia Law

After Prudential denied plaintiff's claim for long-term disability benefits, plaintiff subsequently filed suit against Prudential under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001 et seq. The district court granted summary judgment for Prudential. Because the Plan expressly grants Prudential discretionary authority, the court held that the district court correctly reviewed Prudential’s denial for an abuse of discretion. As such, the court's de novo review of the district court's summary judgment ruling will also apply the abuse of discretion standard. The court concluded that, in light of this record, plaintiff has failed to raise a genuine dispute of material fact that Prudential abused its discretion in denying his claim for long-term disability benefits. Prudential acknowledged that while plaintiff does have depression and anxiety, typically depression and anxiety do not cause large changes in cognitive function, and in plaintiff's case, there is no evidence of valid cognitive impairment from any source. Accordingly, the court affirmed the judgment. View "Burell v. Prudential Ins. Co." on Justia Law

Plaintiff filed suit against Aetna and Hewlett Packard to recover benefits as the beneficiary of her husband’s group life insurance plan under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1132(a)(1)(B). On appeal, plaintiff challenged the district court's final judgment affirming the decision of the ERISA plan administrator to deny benefits. The court concluded that plaintiff has not provided evidence that suggests that the method by which Aetna made its determination in her case was procedurally unreasonable; the court rejected plaintiff's claim that Aetna’s conflict should be given greater weight in the district court’s analysis because it has a history of biased claims administration; and evidence is sufficient to permit a reasonable mind to reach the conclusion that the husband's fall was due to or contributed to by illness. The court further stated that, even accounting for Aetna’s conflict of interest as both insurer and plan administrator, Aetna did not abuse its discretion in determining that the husband's fall was not a covered “accident” under the terms of the Policy, negating recovery under the Policy. Because Aetna's denial of plaintiff's claim was not an abuse of discretion, the court affirmed the judgment. View "Hagen v. Aetna Ins. Co." on Justia Law

Defendant, a participant in the API Enterprises Employee Benefits Plan, appealed the district court's grant of summary judgment in favor of Humana, API's Plan Manager. Humana filed suit under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001 et seq., against defendant seeking, inter alia, an injunction prohibiting him from disposing of an insurance payout and an "equitable lien to enforce ERISA and the terms of the Plan." The court concluded that the district court erred in determining that Humana is an ERISA fiduciary for two reasons: first, the district court's interpretation of the Plan Management Agreement (PMA) is not persuasive where the district court focused on the subrogation and recovery clause, which do not show that Humana had discretion over the Plan or its assets; and second, even if the court interpreted the PMA to give Humana broad power, the district court failed to explain why Humana is not a ministerial agent. Therefore, the court reversed and remanded for further proceedings. View "Humana Health Plan v. Nguyen" on Justia Law

After RSL denied plaintiff's claim for long-term disability benefits, plaintiff, a helicopter pilot with an amputated leg, filed suit under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1132(a)(1)(B). The district court held that the evidence supported RSL's determination that plaintiff's depression and PTSD contributed to his Total Disability. Therefore, RSL did not abuse its discretion by determining that the Exclusion Clause limited plaintiff's right to benefits. Declining to consider whether plaintiff carried his burden to show a right to benefits, the court held that RSL abused its discretion when it determined that plaintiff was not Totally Disabled where there was no evidence to show that he could earn a substantially similar salary in another position. Further, there is no rational connection between the fact that plaintiff can do sedentary work and the conclusion that he could earn a substantially similar salary in any alternative position. The court also held that RSL abused its discretion when it determined that the Exclusion Clause limited plaintiff's right to benefits, and when it affirmed RSL's determination on this basis. Accordingly, the court reversed and remanded, rendering judgment for plaintiff. View "George v. Reliance Standard Life Ins. Co." on Justia Law

Plaintiffs filed suit against Deputy Arnold and Sheriff Graves, alleging violations of federal and state law after Arnold fatally shot their father while responding to a 911 call that the father was threatening to commit suicide. Plaintiffs also filed suit against ReliaStar to recover $179,000 they allege ReliaStar owes them under the father's accidental death policy. The district court granted Arnold and Grave's motions for summary judgment and granted ReliaStar's motion for summary judgment. The court held that Arnold did not violate the father's Fourth Amendment rights when he entered the father's home without a warrant because he had an objectively reasonable belief that the father would imminently seriously injure himself, and the district court did not err in granting Arnold's motion for summary judgment on the warrantless entry claim because Arnold is entitled to qualified immunity; Arnold is entitled to qualified immunity because he did not violate the father's constitutional right to be free from excessive force; the district court did not err in granting summary judgment for Arnold on the assault and battery claims, the false imprisonment claims, and the intentional infliction of emotional distress claim; the district court correctly granted Graves's motion for summary judgment; and the district court did not err in granting summary judgment for ReliaStar where the record was replete with factual evidence that ReliaStar relied on in determining that the father's death was not accidental, demonstrating that ReliaStar could have reached its determination without resorting to the conflict of interest at issue. Accordingly, the court affirmed the judgment of the district court. View "Rice, et al. v. Reliastar Life Ins. Co." on Justia Law

Plaintiffs, former employees of RBC who participated in a wealth accumulation plan (WAP), filed suit alleging that forfeitures of their plan amounted to violations of the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001 et seq. The court reversed the district court's grant of RBC's motion for summary judgment, concluding that, under the plain language of the statute and the interpretations expressed in Murphy v. Inexco Oil Co. and Boos v. AT&T, WAP is an "employee pension benefit plan" under section 1002(2)(A)(ii) and nothing in section 2510.3-2(c) proves otherwise.View "Tolbert, et al. v. RBC Capital Markets Corp., et al." on Justia Law

Plaintiffs filed suit claiming denial of medical insurance, Medicare premiums, and deductible reimbursements. The district court held that the pension plan benefit plan was a "governmental plan" exempt from the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001 et seq., and granted defendants' motion to dismiss for lack of subject matter jurisdiction. The court vacated and remanded, concluding that the district court employed the wrong procedural mechanism for analyzing this case. Because a federal district court has jurisdiction to decide whether or not a plan is an ERISA plan as claimed by plaintiffs, the court concluded that, under Supreme Court precedent and ACS Recovery Services, Inc. v. Griffin, the proper procedural vehicle to raise the question of whether a purported ERISA plan is a "governmental plan" is either Rule 12(b)(6) or, if factual information outside the pleadings is needed, Rule 56. View "Smith, et al. v. Regional Transit Auth., et al." on Justia Law

Plaintiff, a large Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001 et seq., provider, sought a declaration that defendants, three independent, non-ERISA insurance providers, were bound by the terms of the ERISA plan and primarily liable for injuries sustained by individuals covered by the parties. The district court granted defendants' motion to dismiss. The court concluded that the Central States have failed to state a claim for equitable relief as required by Section 502(a)(3) of ERISA; there was no gap in ERISA's enforcement scheme requiring a federal common law claim for unjust enrichment; and Count I does not adequately state a claim for equitable relief under ERISA 502. Accordingly, the court affirmed the judgment of the district court. View "Central States, SE and SW Areas Health and Welfare Fund v. Health Special Risk, Inc., et al" on Justia Law

Plaintiffs filed suit alleging violations of the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001 et seq. Plaintiffs claimed that the bonds that they invested in were an unsuitable investment for the Plans' funds and that defendant made multiple oral misrepresentations to plaintiffs in violation of his fiduciary duties. The district court ruled that there was a disputed issue of material fact as to whether defendant was an ERISA fiduciary, but nonetheless granted summary judgment because defendant provided plaintiffs with written disclosures. The court concluded that defendant did not qualify as a fiduciary under ERISA subsection 1002(21)(A)(i) because he did not exercise discretionary authority or control over the investment at issue; subsection 1002(21)(A)(ii) because he did not receive a fee from the Plans in connection with the investment; and section 1002(21)(A)(iii) because it was inapplicable in this instance. Accordingly, the court affirmed the judgment of the district court. View "Tiblier, et al. v. Dlabal, et al." on Justia Law