ERISA Litigation Roundup: Fifth Circuit Affirms Decision in Favor of American Airlines in Suit Over Plan Investment Alternative Selection

Following the Fifth Circuit’s decision in Ortiz v. American Airlines, plan fiduciaries should be aware that the application of the Thole decision may be deemed inapposite to claims for a defined-contribution plan, where participants’ benefits are tied directly to fiduciary investment decisions.

Continue reading “ERISA Litigation Roundup: Fifth Circuit Affirms Decision in Favor of American Airlines in Suit Over Plan Investment Alternative Selection”

ERISA Litigation Roundup: The DOL Determines That Audio Recordings Must Be Produced Under ERISA’s Claim Regulations

On June 14, 2021, the Department of Labor (DOL) issued an information letter stating that plan fiduciaries have a duty under ERISA’s claim regulations to produce upon request recordings or transcripts of phone calls between benefit claimants and plan representatives regarding their benefit claims. The DOL letter is a call for plan administrators to revisit and potentially refine their processes for recording and storing such conversations.

Continue reading “ERISA Litigation Roundup: The DOL Determines That Audio Recordings Must Be Produced Under ERISA’s Claim Regulations”

Disclosure of Claims-Related Audio Recordings

Claims-related audio recordings may need to be disclosed to claimants upon request, according to an information letter dated June 14, 2021 (“Information Letter”), issued by the Department of Labor’s (“DOL”) Employee Benefits Security Administration (“EBSA”). Although DOL information letters are not binding, as a result of the Information Letter, claimants may start to request audio recordings of conversations relating to benefit denials. Plan sponsors and claims administrators should be prepared for these requests and should train personnel handling telephone calls with claimants accordingly.

The Information Letter addresses whether ERISA and DOL claims procedures regulations thereunder require a plan fiduciary to provide, upon a claimant’s request, a copy of an audio recording and transcript of a telephone conversation between the claimant and a representative of the plan’s insurer regarding a benefit denial. The request at issue in the Information Letter was denied by the claims administrator on the basis that “recordings are for ‘quality assurance purposes,’” and “are not created, maintained, or relied upon for claim administration purposes, and therefore are not part of the administrative record.” The claims administrator maintained that the actual recording is distinct from the notes made available to the claimant, which contemporaneously documented the content of the recorded conversation, and which became part of the “claim activity history through which [the insurer] develops, tracks and administers the claim.”

Continue reading “Disclosure of Claims-Related Audio Recordings”

ERISA Litigation Roundup: Federal District Court Finds ERISA Plan Participants Lack Standing to Challenge Cross-Plan Offsetting

A federal judge in the U.S. District Court for the District of Minnesota dismissed breach of fiduciary duty claims against UnitedHealth Group, holding that participants in ERISA-governed, employer-sponsored health plans lack standing to challenge UnitedHealth Group’s practice of cross-plan offsetting because they have not been denied any benefits and have not been individually injured. The decision underscores the Supreme Court’s ruling that plaintiffs must demonstrate individual injury in order to assert breach of fiduciary duty claims under ERISA.

Continue reading “ERISA Litigation Roundup: Federal District Court Finds ERISA Plan Participants Lack Standing to Challenge Cross-Plan Offsetting”

ERISA Litigation Roundup: Columbia University Settlement: A Reminder of ERISA Litigation Risk

On May 21, 2021, the terms of the proposed ERISA class action settlement in Cates v. The Trustees of Columbia University in the City of New York were announced. The settlement, which includes a $13 million payment and many non-monetary terms, serves as a reminder for fiduciaries/committees to review their processes for selecting and retaining investment options — and to examine the fees and services of plan providers.

Continue reading “ERISA Litigation Roundup: Columbia University Settlement: A Reminder of ERISA Litigation Risk”

ERISA Litigation Roundup: Ninth Circuit Holds State IRA Plans Not Preempted by ERISA

In a matter of first impression, the Ninth Circuit affirmed that ERISA does not preempt a California law that created a state-managed retirement program for certain private employers. Howard Jarvis Taxpayers Association v. California Secure Choice Retirement Savings Program, 2021 WL 1805758 (9th Cir. May 6, 2021).

Continue reading “ERISA Litigation Roundup: Ninth Circuit Holds State IRA Plans Not Preempted by ERISA”

ERISA Litigation Roundup: Eastern District of Michigan Weighs in on Allegations of COBRA Notice Violations

On May 4, 2021, the United States District Court for the Eastern District of Michigan granted in part and denied in part a motion to dismiss in a class action lawsuit regarding the adequate notice of the right to continued insurance coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA). The decision follows a blitz of class action lawsuits alleging deficient COBRA notices and underscores the importance of careful review by employers.

Continue reading “ERISA Litigation Roundup: Eastern District of Michigan Weighs in on Allegations of COBRA Notice Violations”

ERISA Litigation Roundup: Ninth Circuit Affirms Dismissal of ERISA Stock-Drop Suit

On April 19, 2021, in Wilson v. Craver, No. 18-56139, 2021 WL 1523253 (9th Cir. Apr. 19, 2021), the U.S. Court of Appeals for the Ninth Circuit affirmed the dismissal of an ERISA stock-drop lawsuit brought against fiduciaries of Edison International’s employee stock ownership plan (ESOP), holding that the plaintiff failed to meet the “more harm than good” pleading standard set forth in Fifth Third Bancorp v. Dudenhoeffer, 573 U.S. 409, 428 (2014).

Continue reading “ERISA Litigation Roundup: Ninth Circuit Affirms Dismissal of ERISA Stock-Drop Suit”