Breach of Fiduciary Duty under ERISA: Ninth Circuit Clarifies That Mere Disclosure of Plan Documents Is Insufficient “Actual Knowledge” to Trigger Statute of Limitations

Posted in: Disability Insurance News, ERISA, Fiduciary Duty, Insurance Litigation Blog, Pension Benefits, Statute of Limitations January 23, 2019

In pension and savings plan cases, it can often take several years before an employee realizes that there has been a breach of fiduciary duty.  Typically, an employee’s financial loss triggers an investigation that later reveals the facts of the breach.  But how long does an employee have to bring a claim in court?  The answer depends on the employee’s “actual knowledge” of the facts of the breach or violation.  There is a conflict among federal circuit courts of appeal on whether an employee should be deemed to have knowledge of 401(k) prospectuses and fund information simply because the employer makes this information available to the employee.  In a recent decision by the Ninth Circuit, Sulyma v. Intel Corp. Investment

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Breach of Fiduciary Duty under ERISA: Making the Insurer or Plan Administrator Responsible for their actions towards a Plan’s Participants and Beneficiaries

Posted in: Accidental Death or Dismemberment, Equitable Relief, ERISA, Fiduciary Duty, Insurance Litigation Blog, Life Insurance, Waiver & Estoppel November 06, 2018

In a previous blog, we addressed the doctrines of equitable estoppel and waiver when the Employee Retirement Income Security Act of 1974 (“ERISA”) governs their insurance or pension plan.  As we explained, both doctrines provide an insured with methods of forcing an insurance company to honor its word and previous conduct.  However, insureds often have difficulty invoking the doctrines.  ERISA governs a wide variety of plans that provide life insurance, disability insurance, accidental death and dismemberment insurance and pension benefits.  Given the challenges of invoking equitable estoppel and waiver in the ERISA context, do plan participants and their beneficiaries have other ERISA specific tools to force insurers to honor their word and previous conduct?  Luckily, they do.  A lawsuit …

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Do Arbitration Clauses in Employment Contracts Automatically Preclude Employees From Litigating ERISA Claims?

Posted in: Annuities, Beneficiaries, ERISA, Fiduciary Duty, Insurance Litigation Blog, Pensions, Retirement Plans August 29, 2018

Many times, employees must sign written employment contracts before beginning a new position.  These contracts generally set forth the terms of the relationship between the employer and employee.  They also establish both the rights and responsibilities of the two parties.  Employers often include an arbitration clause in their employment contract.  This means that any disputes that arise between the employer and employee must be settled through arbitration, rather than through the courts.

But what happens when an employee sues his employer not on his own behalf, but on behalf of another entity for claims that the employee cannot bring in his individual capacity?  For instance, in the context of ERISA, employees who participate in an employer-sponsored ERISA plan can bring …

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Multi-Million Dollar Disgorgement Award Struck Down in Rochow - But the Disgorgement Remedy May Still Be Alive

Posted in: Case Updates, Disability Insurance, Disability Insurance News, Equitable Relief, ERISA, Fiduciary Duty, Insurance Litigation Blog March 31, 2015

In December 2013, we published an article highlighting the Sixth Circuit Court of Appeals’ bold decision to award the plaintiff disability benefits plus $2.8 million in disgorged earnings, as a potential “game-changer” in Employee Retirement Income Security Act of 1974 (“ERISA”) litigation—that is, if it survived review.  Rochow v. Life Ins. Co. of N. Am., 737 F.3d 415 (6th Cir. 2013) (“Rochow I”).  Alas, the Sixth Circuit Court of Appeals vacated the decision in February 2014 and stayed the case.  Rochow v. Life Ins. Co., 2014 U.S. App. LEXIS 3158 (6th Cir. Feb. 19, 2014) (“Rochow II”).  Finally, in March 2015, the Court of Appeals issued an en banc decision vacating the disgorgement …

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Standing Spine(dex) Adjustment – Ninth Circuit Finds Healthcare Providers Have Article III Standing in Denial of Benefit Claims Under ERISA

Posted in: Case Updates, ERISA, Fiduciary Duty, Standing January 13, 2015

A universal part of the American medical experience is paperwork. Everyone is familiar with visiting a healthcare provider for the first time, filling out history forms and signing pages of documents that they either do not understand or do not care about. The Ninth Circuit recently grappled with a minimally explored legal issue surrounding one such document: whether a non-participant healthcare provider, as assignee of health plan beneficiaries under an assignment form, has Article III standing to bring a denial of benefits claim under ERISA.…

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Third-Party ERISA Administrator Abused Discretion by Denying Medical Coverage: A Tale of What Not to Do

Posted in: Abuse of Discretion, Administrative Record, Conflict of Interest, ERISA, Fiduciary Duty, Health Insurance, Standard of Review September 16, 2014

Sometimes an administrator so unashamedly abuses its discretion in handling an insurance claim that its actions constitute a textbook example of “what not to do” for other administrators and the ensuing decision provides a clear illustration of how courts apply an abuse of discretion standard of review under the Employee Retirement Income Security Act (“ERISA”).  Indeed, a recent case clarified that plan administrators and third-party claims administrators alike are held to comparable standards when issuing claims decisions.  In Pacific Shores Hospital v. United Behavioral Health, 2014 WL 4086784; 2014 U.S. App. LEXIS 16062 (9th Cir. Cal. Aug. 20, 2014) (“Pacific Shores”) the Ninth Circuit Court of Appeal reversed the district court, finding the third-party administrator acted improperly by denying …

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Rochow v. LINA: A Game-Changer in ERISA Disability Benefits Litigation

Posted in: Case Updates, Disability Insurance, Disability Insurance News, Equitable Relief, ERISA, Fiduciary Duty, Insurance Litigation Blog December 13, 2013

While this blog often discusses disability, life and health insurance/employee benefit decisions under the Employee Retirement Income Security Act of 1974 (“ERISA “), we rarely discuss federal circuit court of appeal decisions from outside the Ninth Circuit Court of Appeals (which governs California).  We are making an exception here, as a recent case from the Sixth Circuit Court of Appeals really caught our attention.  The case is Rochow v. Life Insurance Company of North America, __ F.3d ___ (6th Cir. December 6, 2013).  It is a “game-changer” in the world of ERISA disability, life and health insurance/employee benefit litigation, and could fundamentally change the way in which ERISA remedies are discussed and how these cases are litigated.  To say …

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California Court Limits the Enforceability of Contractual Limitation Periods Because the Insurer Failed to Properly Provide ERISA Plan Documents

Posted in: Case Updates, Disability Insurance, Disability Insurance News, ERISA, Fiduciary Duty, Insurance Litigation Blog June 14, 2013

In an interesting opinion concerning a dispute over long-term disability (“LTD”) insurance benefits due under an ERISA plan, a District Court held that an ERISA administrator cannot rely on a contractual limitation period to defeat an insured’s claim where it failed to provide the insured with sufficient documentation and/or notice of the existence of the limitation period.  The decision in Barnett v. California Edison Co. LTD Plan, U.S. Dist. LEXIS 71345 (E.D. Cal. May 20, 2013) emphasizes that administrators of ERISA-governed policies must first discharge their fiduciary duty to fully inform the insured of existing contractual limitation periods before attempting to enforce provisions to defeat a lawsuit initiated by a plan participant.…

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ERISA Authorizes Breach of Fiduciary Duty Action for Misconduct When it Impairs Plan Assets in Participant's Individual Account

Posted in: Case Updates, ERISA, Fiduciary Duty, News, Standing January 14, 2010

Can a plan participant sue for breach of fiduciary duty when his individual account is diminished by a failure of the administrator to follow his investment instructions? The U.S. Supreme Court answered this important question in the affirmative in James LaRue  v. DeWolff, Boberg & Associates Inc., 128 S. Ct. 1020 (2008).  LaRue filed an action under ERISA alleging that his employer (also the plan administrator) breached its fiduciary duty with regards to an ERISA-regulated 401(k) retirement savings plan by failing to follow his investment instructions.  Relying on the Supreme Court’s ruling in Massachusetts Mutual Life Insurance Co. v. Russell that a participant could not bring a suit to recover consequential damages resulting from the processing of a claim under …

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