- In Borrero v. United HealthCare of New York, Inc., 2010 WL 2652456 (11th Cir. July 6, 2010), healthcare providers (and their representative organizations) alleged state law claims against United HealthCare for failing to pay them the agreed upon rate contained in the subscriber agreements rate for services. The Eleventh Circuit held that these claims were preempted by ERISA because at least some of the allegations were dependent on ERISA, and that a prior litigation asserting claims under RICO did not preclude this litigation from proceeding.
- In Kenseth v. Dean Health Plan, Inc., 2010 WL 2557767 (7th Cir. 2010), the Seventh Circuit concluded that issues of fact precluded a finding of summary judgment in favor of defendants on claims that the plan breached its fiduciary duty by providing a plan participant with an ambiguous summary of her insurance benefits, by inviting her to call its customer service representative with questions about coverage but failing to inform her that the information provided to her did not bind the Plan, and by failing to advise the participant of alternative channels to pursue in order to obtain a definitive determination of coverage in advance of her surgery. The court also ruled that the district court should, on remand, determine whether there is any appropriate equitable relief available to plaintiff.
- In Mack v. Kuckenmeister, 2010 WL 2853881 (9th Cir. July 22, 2010), the Ninth Circuit held state courts have jurisdiction to determine whether domestic relations orders (DROs) are qualified domestic relations orders (QDROs) and thus concluded that a Nevada court’s determination in a divorce proceeding that a DRO was a QDRO was binding in federal court. The Ninth Circuit’s holding conflicts with the DOL’s guidance, which provides that federal courts have exclusive jurisdiction to determine whether a domestic relations order is a QDRO. See DOL’s FAQs About Qualified Domestic Relations Orders (“Who determines whether an order is a QDRO?”), at http://www.dol.gov/ebsa/faqs/faq_qdro.html.
- In Walker v. Monsanto Co. Pension Plan, 2010 WL 2977304 (7th Cir. July 30, 2010), the Seventh Circuit held that Monsanto’s cash balance plan did not violate ERISA’s age discrimination provision. In an effort to standardize the early retirement options under the plan, the plan calculated the opening balance of each employee’s account by crediting each account with an amount equal to the lump sum value of the employee’s accrued benefit at the time of conversion from a traditional defined benefit plan, discounted by 8.5% per year for each year he or she was younger than age 55 at the time of the conversion. Each year that passed after the conversion, an 8.5% credit would be added to a participant’s account balance until the employee reached age 55. Plaintiffs claimed that this formula reduced employees benefit accruals on the basis of age because the benefit accruals ceased at the attainment of age 55. The Seventh Circuit ruled that the 8.5% interest discounts and credits are not benefit accruals because they “never chang[ed] the accrued benefit at normal retirement age but reduc[ed] the benefit if the employees choose to receive payment early.”
- In Tomlinson v. El Paso Corp., No. 04-cv-02686 (D. Col. July 26, 2010), the district court held that El Paso’s conversion to a cash balance pension plan and its implementation of a wear-away provision did not discriminate on the basis of age in violation of the ADEA. In so ruling, the court resolved the last outstanding claim in an almost six-year-long litigation over the conversion.
- In In re JPMorgan Chase Cash Balance Litig., No. 06 Civ. 0732 (S.D.N.Y. July 15, 2010), the district court approved a settlement between JPMC and approximately 100,000 participants, resolving the employees’ claims that the company violated ERISA by backloading benefits and failing to provide adequate notice of its plan’s conversion from a traditional defined benefit plan to a cash balance plan. The settlement requires the company to provide to class members the assistance of a financial planner over a one-year period and granted reimbursement of plaintiffs’ costs and expenses in the amount of $600,000, but not attorneys’ fees.
- In Buus v. WaMu Pension Plan, No. 07 Civ. 00903 (W.D. Wash. July 27, 2010), the district court preliminarily approved a settlement of a claim that WaMu failed to notify participants that its plans’ conversion to cash balance plans decreased their benefit accrual rate. The settlement provides that WaMu will pay $20 million to plaintiffs and $4.1 million to plaintiffs’ attorneys.
In Metro. Life Ins. Co. v. Jenkins, 2010 WL 2898302 (D. Del. July 20, 2010), an interpleader action brought by MetLife to determine the proper beneficiary of a life insurance policy, the court determined that the decedent “substantially complied” with the terms of the policy when he completed and signed his pension application changing the beneficiary of his life insurance policy from his wife to his aunt, even though the signature on the application was not notarized. The court ruled that although there was language in the SPD that required notarization, it was not apparent that the actual pension application required notarization and the fact that the completed application was accepted by the decedent’s employer “demonstrate[d] substantial compliance with the requirements necessary to change the life insurance beneficiary.” Additionally, the court dismissed a breach of fiduciary duty counterclaim brought by the decedent’s wife that challenged the propriety of MetLife’s decision to file the interpleader action instead of simply awarding the benefits to her, noting that a “stakeholder who is permitted to bring an interpleader action cannot be liable for a breach of fiduciary duty, based on its failure to choose between the two adverse claimants.”