tag:blogger.com,1999:blog-12407349506694228662024-03-14T01:06:20.097-07:00AN EYE SINGLE: the only ERISA Blog you'll ever needJoseph Creitz of <a href="http://www.creitzserebin.com">Creitz & Serebin LLP</a> publishes and maintains this blog to keep clients, prospective clients, colleagues, and others interested in the developing ERISA jurisprudence and ERISA policy up to date on new legal developments and other matters of interest relating to ERISA - the Employee Retirement Income Security Act of 1974, as amended. In the absence of attribution, the views stated here are entirely our own.Anonymoushttp://www.blogger.com/profile/07166681289750524112noreply@blogger.comBlogger12125tag:blogger.com,1999:blog-1240734950669422866.post-59828408420042431132016-11-21T12:57:00.000-08:002016-11-21T12:57:48.182-08:00CHECK OUT OUR FOUNDER'S NEW LAW PODCAST!The founder of An Eye Single, and managing partner of Creitz & Serebin LLP, has launched a weekly podcast to discuss legal issues and legal news with a touch of humor and (we hope) insight. The podcast is called "The Law Is My Ass" -- a farcical nod to Shakespeare -- or "Law My Ass!" for short. You can find it on <a href="https://itunes.apple.com/us/podcast/the-law-is-my-ass/id1176316667 ">iTunes</a> (<- just click that link) and on the <a href="http://lawmyass.libsyn.com/">web</a> (<- just click that link), or follow it using your favorite RSS tracker at its <a href="
http://lawmyass.libsyn.com/rss">RSS link</a>. Check it out - it has a little something for everyone from experienced attorneys to folks who don't even know the difference between arbitration and mediation. The podcast accepts suggestions, feedback, and listener questions at lawmyass@gmail.com
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And in the meantime, ff you find yourself struggling with your ERISA plan's administrator or insurer over your benefits (pension, disability, health, or otherwise), <a href="http://www.creitzserebin.com">let us see if we can help.</a>Anonymoushttp://www.blogger.com/profile/07166681289750524112noreply@blogger.com0tag:blogger.com,1999:blog-1240734950669422866.post-29620887332501676942016-03-19T21:07:00.000-07:002016-03-19T21:07:09.033-07:00Ninth Circuit weighs the impact of an ambiguous insurance policy, and more!This last Tuesday, Joe Creitz argued to the Ninth Circuit on behalf of Nurse Diana Anderson, a disabled former operating room nurse to whom Sun Life denied disability benefits because, it asserted, when her employer gave her a temporary accommodated job at full pay to see if she could recover from her injuries, she somehow mutated into a receptionist. Insurer Sun Life argued that its policy rendered Nurse Anderson a receptionist. Nurse Anderson argued that the policy is ambiguous and must, therefore, be construed in her favor <a href="http://www.ca9.uscourts.gov/media/view_video.php?pk_vid=0000009256">You can listen to the Anderson v. Sun Life oral argument here if you are interested: http://www.ca9.uscourts.gov/media/view_video.php?pk_vid=0000009256</a>
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Also pending this week before the Ninth Circuit was <i>Upadhyay v. Aetna</i>, which the court deemed submitted on the briefs. This issues raised there are two (1) when an employee executes a settlement and release with her employer that arguably extends to her ERISA claims, but in good faith provides it to the insurer during the administrative process and the insurer never raises it, can the insurer invoke it for the first time during the litigation? (2) Can an ERISA-regulated disability insurer invoke in litigation a contractual limitations period that it never discussed in its denial letters?
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In the briefs, we argued that the answer to both those questions is "no". The first is resolved by the Ninth Circuit's holdings in <i>Mitchell v. CB Richard Ellis, Harlick v. Blue Shield, and Spinedex v. United</i>.
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The Ninth Circuit has not addressed the second issue, but three other circuits have and all have come down on the side of the claimants: <i>Moyer v. MetLife</i>, 762 F.3d 503, 505-507 (6th Cir. 2014); <i>Mirza v. Ins. Adm’r of America, Inc.</i>, 800 F.3d 129, 137 (3rd Cir. 2015; <i>Santana-Díaz v. MetLife</i>, --- F.3d ----, No. 15-1273, 2016 WL 963830 (1st Cir. March 14, 2016).
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We are optimistic about our prospects in both appeals. Tune in for updates, and don't hesitate to <a href="http://www.creitzserebin.com">contact us</a> if you have questions.Anonymoushttp://www.blogger.com/profile/07166681289750524112noreply@blogger.com0tag:blogger.com,1999:blog-1240734950669422866.post-62330768173102539262015-12-20T00:15:00.000-08:002015-12-20T00:15:04.760-08:00Two More Ninth Circuit Cases On The Horizon<a href="http://www.creitzserebin.com">Creitz & Serebin LLP</a> is counsel for plaintiff-appellants in two appeals pending before the Ninth Circuit, both of which will have oral arguments heard in March 2016.
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In one, <i>Anderson v. Sun Life</i>, the Ninth Circuit will be deciding whether, in the face of ambiguous language in a long term disability policy, the plan's insurer can deny benefits to a career operating room nurse on the basis that she ceased to be a nurse when the hospital where she worked gave her a temporary light duty job as an accommodation to her injury.<br><br>
The second, <i>Upadhyay v. Aetna</i>, asks the court to decide two issues: <br>
First, does the Ninth Circuit's holding in <i>Harlick v. BCBS</i> (that plan insurers waive all defenses to the payment of benefits not raised during the administrative process) apply to a settlement agreement between the participant and her employer, when the insurer always knew of the existence of the settlement, but failed to raise it until after litigation had commenced; and<br><br>
Second, in light of the Supreme Court's decisions in <i>Heimeshoff v. Hartford</i> and <i>UNUM v. Ward</i>, can an ERISA fiduciary insurer enforce a contractual limitations period contained in its insurance policy that <br>(1) violates the California Insurance Code; <br>(2) was not disclosed at any point during the administrative process; and <br>(3) would nullify the California notice-prejudice rule (something that the Supreme Court in <i>UNUM v. Ward</i> said it would make "scant sense" to permit insurers to do).
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If you find yourself struggling with your ERISA plan's administrator or insurer over your benefits (pension, disability, health, or otherwise), <a href="http://www.creitzserebin.com">let us see if we can help</a>.Anonymoushttp://www.blogger.com/profile/07166681289750524112noreply@blogger.com0tag:blogger.com,1999:blog-1240734950669422866.post-48900245392144977002015-12-19T23:56:00.000-08:002015-12-20T00:01:00.068-08:00Another Big Win at the Ninth Circuit for ERISA Participants and BeneficiariesIn 2014, a unanimous 3-judge panel of the Ninth Circuit ruled in favor of <a href="http://www.creitzserebin.com">Creitz & Serebin</a>'s clients in their appeal from the District Court of Arizona. <i>Spinedex v. United</i>, 770 F.3d 1282 (9th Cir. 2014), cert. denied, 136 S. Ct. 317 (2015). Among the issues that the Ninth Circuit addressed were these:<br><br>
- Where a healthcare provider sues for ERISA-regulated benefits pursuant to an assignment from the patient/plan-beneficiary, there is no requirement for the provider to send a balance bill to the patient in order for the provider to have standing to sue under Article III of the U.S. Constitution. It seems like a simple and obvious point, but a number of courts had gone sideways on this question and the Ninth Circuit got it right.<br><br>
- The Ninth Circuit reemphasized its earlier holding from <i>Harlick v. Blue Shield of California</i>, which had held that an ERISA claims administrator waives (and therefore cannot assert in litigation) any defenses to the payment of benefits that it failed to assert during the administrative process.<br><br>
- The Claims Regulation propounded by the United States Secretary of Labor has long provided that the failure of a claims administrator to adhere to the regulations requirements results in "deemed denial" -- i.e., the participant can go straight to court if the administrator fails to follow the regulation. The Ninth Circuit held that administrators' failure to comply with this regulation can be no more than de minimis, effectively requiring strict compliance with the regulation (the insurer had sought a "substantial compliance" standard that would have severely disadvantaged participants and beneficiaries).<br><br>
- The Ninth Circuit expanded on its earlier unanimous en banc holding in my case <i>Cyr v. Reliance</i>, to hold that proper party defendants under ERISA section 502(a)(1)(B) also include claims administrators. (I posted previously about this case when the Ninth Circuit issued its opinion).<br><br>
On that last issue, the insurer sought certiori from the United States Supreme Court, which the Supreme Court denied on October 13, 2015. <i>Spinedex v. United</i>, 770 F.3d 1282 (9th Cir. 2014), cert. denied, 136 S. Ct. 317 (2015).<br><br>
Along with <i>Cyr</i>, was another landmark ERISA decision from the Ninth Circuit that <a href="http://www.creitzserebin.com">Creitz & Serebin</a> secured along with our co-counsel, <a href="http://www.garofololaw.com">Joe Garofolo</a>. Here's a <a href="https://scholar.google.com/scholar_case?case=4179257443391888898&hl=en&as_sdt=6&as_vis=1&oi=scholarr">link to the Ninth Circuit's Decision</a>.
If you find yourself struggling with your ERISA plan's administrator or insurer over your benefits (pension, disability, health, or otherwise), <a href="http://www.creitzserebin.com">let us see if we can help.</a>Anonymoushttp://www.blogger.com/profile/07166681289750524112noreply@blogger.com0tag:blogger.com,1999:blog-1240734950669422866.post-8872222379380064012015-12-19T23:37:00.002-08:002015-12-20T00:40:59.508-08:00I'm pleased to announce that I've been conferred the honor of bing a Northern California Super Lawyer in the area of Employee Benefits for the third year in a row. I was also a member of the Super Lawyers Blue Ribbon Panel for the 2016 nominees.
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<!-- end super lawyers badge -->Anonymoushttp://www.blogger.com/profile/07166681289750524112noreply@blogger.com0tag:blogger.com,1999:blog-1240734950669422866.post-91974249932693596272015-09-18T16:13:00.002-07:002015-09-18T16:15:15.473-07:00I'm proud to report that AVVO has rated me "superb" in the field of employment benefits law.
<script type="text/javascript" src="http://www.avvo.com/assets/badges-v2.js"></script><div class="avvo_badge" data-type="rating" data-specialty="19" data-target="http://www.avvo.com/professional_badges/284454" data-version="2"><div class="avvo_content"><a rel="me" target="_blank" href="http://www.avvo.com/attorneys/94104-ca-joseph-creitz-284454.html?utm_campaign=avvo_rating&utm_content=284454&utm_medium=avvo_badge&utm_source=avvo">Lawyer Joseph Creitz</a> | <a target="_blank" href="http://www.avvo.com/employee-benefits-lawyer/ca/san_francisco.html?utm_campaign=avvo_rating&utm_content=284454&utm_medium=avvo_badge&utm_source=avvo">Top Attorney Employee Benefits</a></div></div>Anonymoushttp://www.blogger.com/profile/07166681289750524112noreply@blogger.com0tag:blogger.com,1999:blog-1240734950669422866.post-55866807763668220892011-09-14T11:18:00.000-07:002013-05-13T14:20:51.350-07:00A silver lining in MunizLate last year, the Ninth Circuit issued a decision that is not generally particularly favorable to ERISA disability insurance benefits plaintiffs. <span style="font-style:italic;">Muniz v. Amec Constr. Mgmt., Inc.</span>, 623 F.3d 1290, 1295 (9th Cir. 2010). The case involved a plaintiff's appeal from a district court decision in a case where the courts reviewed the insurer's adverse benefit determination de novo. The Ninth Circuit held generally that the failure of the insurer to provide a full and fair review (which would be evidence of a conflict of interest in a case reviewed for abuse of discretion), was not necessarily a relevent consideration for a court conducting a de novo review of the insurer's decision.<br /><br />The case contained one little gem, however. In dicta, <span style="font-style:italic;">Muniz</span> stated that, in cases reviewed for abuse of discretion, if the administrator has a structural conflict of interest (see my post about the Supreme Court's decision in <span style="font-style:italic;">Glenn v. MetLife</span>, below), the administrator has the burden of proving that the conflict of interest did not improperly influence its decision. <span style="font-style:italic;">Muniz</span>, 623 F.3d at 1295.<br /><br />Last week in an unpublished decision in <a href="http://www.ca9.uscourts.gov/datastore/memoranda/2011/09/08/09-56761.pdf">Dine v. MetLife</a> (click the case name to read the decision at the Ninth Circuit's web site) -- an abuse of discretion case -- the Ninth Circuit cited <span style="font-style:italic;">Muniz</span> for exactly that proposition, reversed the district court, and ordered benefits be paid to Ms. Dine forthwith. Prominent in <i>Dine</i>, a very short decision, is the following quote: <div>"<span class="Apple-style-span" style="font-size:100%;"><span style=" ;font-family:'TimesNewRoman';"><span style="font-weight:bold;">The administrator has the burden of proving that the conflict of interest did not improperly influence its decision.</span> </span><span style=" ;font-family:'TimesNewRoman,Italic';"><i>See Muniz v. Amec Constr. Mgmt., Inc</i>., </span></span><span style=" ;font-family:'TimesNewRoman';"><span class="Apple-style-span" style="font-size:100%;">623 F.3d 1290, 1295 (9th Cir. 2010)."</span><br /></span></div><div><br /></div><div>Ever since the Supreme Court issued its landmark decision in <span style="font-style:italic;">Glenn v. MetLife</span>, courts, claimants, and insurers have struggled to apply its mandate that the insurer's conflict of interest be weighed as a factor. In the Ninth Circuit, at least, weighing that factor just became simpler. If <span style="font-style:italic;">Muniz</span> and <span style="font-style:italic;">Dine</span> mean what they say, then conflicted fidicuiaries (i.e., those that both adjudicate and pay claims) must now overcome a presumption that their conflict tainted their claims administration.<br /><br />At the end of the day this is a fair and just implimentation of the law, since the claimaint rarely can prove with certitude what went on behind the administrator's closed doors. Rather, i<span style="font-style:italic;"></span>t is the fiduciary that controls the adjudication, controls the evidence, and must honor its fiduciary duty with "<span style="font-weight:bold;">an eye single</span>" to the interests of the participants and beneficiaries. It is consistent with hundreds of years with of common law trusts and fiduciary jurispridence that the burden of proving fiduciary compliance should rest with the fiduciary.</div>
</p>If you find yourself struggling with your ERISA plan's administrator or insurer over your benefits (pension, disability, health, or otherwise), <a href="http://www.creitzserebin.com">let us see if we can help.</a> Anonymoushttp://www.blogger.com/profile/07166681289750524112noreply@blogger.com0tag:blogger.com,1999:blog-1240734950669422866.post-23108462587228579872011-06-23T14:06:00.001-07:002013-05-13T14:21:07.236-07:00Ninth Circuit Rules Unanimously For My Client Laura Cyr<div style="word-wrap: break-word; -webkit-nbsp-mode: space; -webkit-line-break: after-white-space; font-family: Helvetica; font-size: medium; "><div><u>Cyr v. RSL</u>, 642 F.3d. 1202 (9th Cir. June 22, 2011)(en banc) </div><div><br /></div><div>Laura Cyr, for whom I am co-counsel, sued her former employer's ERISA disability plan insurer after the insurer reneged on its promise to implement an upward correction of her disability benefit following the settlement of her wage discrimination lawsuit against the employer. Mrs. Cyr alleged claims for benefits under 29 U.S.C. § 1132(a)(1)(B), estoppel, and breach of fiduciary duty. The insurer, Reliance Standard Life Insurance ("RSL") initially prevailed on summary adjudication as to the (a)(1)(B) claim only, on the basis that the Ninth Circuit's holdings in <i>Ford v. MCI </i>and<i> Everhart v. Allmerica</i> categorically insulated ERISA plan insurers from civil liability to participants for payment of benefits.</div><br /><div><br /></div><div><span class="Apple-style-span" style="font-family:Arial;">In a decision authored by Judge Clifton, a unanimous 11-judge en banc panel of the Ninth Circuit explicitly overturned its prior decisions in </span><i><span class="Apple-style-span" style="font-family:Arial;">Ford v. MCI</span></i><span class="Apple-style-span" style="font-family:Arial;">, </span><i><span class="Apple-style-span" style="font-family:Arial;">Everhart v. Allmerica</span></i><span class="Apple-style-span" style="font-family:Arial;">, </span><i><span class="Apple-style-span" style="font-family:Arial;">Spain v. Aetna</span></i><span class="Apple-style-span" style="font-family:Arial;">, and </span><i><span class="Apple-style-span" style="font-family:Arial;">Gelardi v. Pertec</span></i><span class="Apple-style-span" style="font-family:Arial;"> -- cases dating back to 1985 that RSL and other ERISA plan insurers had intermittently invoked in order to avoid liability for ERISA benefits on technical procedural grounds. Citing the Supreme Court's decision in </span><span class="Apple-style-span" style="font-family:Arial;"><i>Harris Trust & Savings Bank v. Salomon </i></span><span class="Apple-style-span" style="font-family:Arial;"><i>Smith Barney, Inc.</i>, 530 U.S. 238 (2000), t</span><span class="Apple-style-span" style="font-family:Arial;">he Ninth Circuit held that the remedial provisions contained in ERISA § 502(a)(1)(B), 29 U.S.C. § 1132(a)(1)(B), imposes no categorical limitations upon the universe of appropriate defendants. As such, an insurance company that makes benefit determinations and pays the benefits, such as Appellant RSL, is an entirely appropriate defendant in a suit for benefits under that section of ERISA. </span></div><div><br /></div><div><div>This result of the case will likely prove beneficial for thousands of ERISA plan participants nationwide who are forced to pursue their benefit claims in court. It also benefits employers who no longer need to fear that they will be forced into litigation to defend the conduct of their insurers.</div></div><div><br /></div><div>Additionally, there are at least four notable procedural features of <i>Cyr v. RSL,</i> all of which are rare in federal appellate practice: first, the Ninth Circuit heard the case en banc in the first instance -- this was a hearing en banc, not a rehearing en banc; second, an 11-judge en banc panel of the Ninth Circuit issued a unanimous opinion; third, the Ninth Circuit explicitly overturned its own historical precedent; and finally, the United States Secretary of Labor filed an amicus brief in support of Mrs. Cyr's petition to have the matter heard en banc, and appeared and argued at the en banc oral argument. These events speak to the court's recognition of the importance of the issue that it resolved.</div><div><br /></div><div>Here is a link to the published decision:</div><div><br /><a href="http://www.ca9.uscourts.gov/datastore/opinions/2011/06/22/07-56869.pdf"><br />http://www.ca9.uscourts.gov/datastore/opinions/2011/06/22/07-56869.pdf</a></div><div><br /></div></div>
</p>If you find yourself struggling with your ERISA plan's administrator or insurer over your benefits (pension, disability, health, or otherwise), <a href="http://www.creitzserebin.com">let us see if we can help.</a> Anonymoushttp://www.blogger.com/profile/07166681289750524112noreply@blogger.com0tag:blogger.com,1999:blog-1240734950669422866.post-70258143721682109832011-05-17T10:46:00.001-07:002013-05-13T14:21:20.693-07:00CIGNA v. Amara - Supreme Court recognizes a new ERISA remedy for aggrieved participants!T<span class="Apple-style-span" style="font-family:'times new roman';">he insurance industry, oddly, is characterizing this case as a victory for CIGNA. If it's a victory for insurers and employers, it's a pyrrhic one at best. The case does hold that the remedies available under ERISA § 502(a)(1)(B) are limited to those specifically identified in that section of the statute, i.e., benefits, or a declaration of the right to future benefits. Under 502(a)(1)(B), a court does not have authority to reform a plan or award other remedies or damages.</span><div><span class="Apple-style-span" style="font-family:'times new roman';"><br /></span></div><div><span class="Apple-style-span" style="font-family:'times new roman';">However, the Court significantly altered the remedies available under § 502(a)(3). This provision is a catch all that imposes liability upon fiduciaries and parties in interest for breaches of fiduciary duty not otherwise remedied by (a)(1)(B), or by 502(a)(2). The Court has consistently held that the only rememdies available under (a)(3) are equitable remedies (which the Court has held to mean such remedies as were traditionally authorized and available in court of equity in the era of the English divided bench). </span><i><span class="Apple-style-span" style="font-family:'times new roman';">Mertens v. Hewitt</span></i><span class="Apple-style-span" style="font-family:'times new roman';">, 508 U.S. 248 (1993), </span><i><span class="Apple-style-span" style="font-family:'times new roman';">Great-West v. Knudsen</span></i><span class="Apple-style-span" style="font-family:'times new roman';">, 534 U.S. 204 (2002). </span><span class="Apple-style-span" style="font-size:11px;"><span class="Apple-style-span" style="font-family:'times new roman';"> </span></span><span class="Apple-style-span" style="font-family:'times new roman';">That limitation -- equitable remedies only -- has consistently been held </span><i><span class="Apple-style-span" style="font-family:'times new roman';">not</span></i><span class="Apple-style-span" style="font-family:'times new roman';"> to include the imposition of monetary damages.</span></div><div><span class="Apple-style-span" style="font-family:'times new roman';"><br /></span></div><div><span class="Apple-style-span" style="font-family:'times new roman';">In </span><i><span class="Apple-style-span" style="font-family:'times new roman';">Amara</span></i><span class="Apple-style-span" style="font-family:'times new roman';">, however, the Court wrote that in addition to remedies like reformation of plan documents, and injunctive relief, the traditional equitable remedy of "surcharge" </span><i><span class="Apple-style-span" style="font-family:'times new roman';">is indeed available</span></i><span class="Apple-style-span" style="font-family:'times new roman';"> under (a)(3) to remedy a fiduciary breach. The Court in </span><i><span class="Apple-style-span" style="font-family:'times new roman';">Amara</span></i><span class="Apple-style-span" style="font-family:'times new roman';"> wrote</span></div><div><p style="margin: 0.0px 0.0px 0.0px 0.0px; text-align: justify; text-indent: 11.0px; line-height: 13.3px; font: 11.0px 'Century Schoolbook'"><br /></p><p style="text-align: justify;text-indent: 0px; margin-top: 0px; margin-right: 0px; margin-bottom: 0px; margin-left: 0px; line-height: 13.3px; font: normal normal normal 11px/normal 'Century Schoolbook'; "><span class="Apple-style-span" style="font-family:verdana;"><span class="Apple-style-span" style="font-size:small;">[The] </span></span><span class="Apple-style-span" style="font-family:verdana;"><span class="Apple-style-span" style="font-size:small;">District Court injunctions require the planadministrator to pay to already retired beneficiariesmoney owed them under the plan as reformed. But the fact that this relief takes the form of a money paymentdoes not remove it from the category of traditionally equitable relief. Equity courts possessed the power to providerelief in the form of monetary “compensation” for a loss resulting from a trustee’s breach of duty, or to prevent the trustee’s unjust enrichment. Restatement (Third) of Trusts §95, and Comment </span></span><i><span class="Apple-style-span" style="font-family:verdana;"><span class="Apple-style-span" style="font-size:small;">a </span></span></i><span class="Apple-style-span" style="font-family:verdana;"><span class="Apple-style-span" style="font-size:small;">(Tent. Draft No. 5, Mar. 2,2009) (hereinafter Third Restatement); Eaton §§211–212,at 440. Indeed, prior to the merger of law and equity thiskind of monetary remedy against a trustee, sometimes called a “surcharge,” was “exclusively equitable.” </span></span><i><span class="Apple-style-span" style="font-family:verdana;"><span class="Apple-style-span" style="font-size:small;">Princess Lida of Thurn and Taxis </span></span></i><span class="Apple-style-span" style="font-family:verdana;"><span class="Apple-style-span" style="font-size:small;">v. </span></span><i><span class="Apple-style-span" style="font-family:verdana;"><span class="Apple-style-span" style="font-size:small;">Thompson</span></span></i><span class="Apple-style-span" style="font-family:verdana;"><span class="Apple-style-span" style="font-size:small;">, 305 U. S. 456, 464 (1939); Third Restatement §95, and Comment </span></span><i><span class="Apple-style-span" style="font-family:verdana;"><span class="Apple-style-span" style="font-size:small;">a; </span></span></i><span class="Apple-style-span" style="font-family:verdana;"><span class="Apple-style-span" style="font-size:small;">G. Bogert& G. Bogert, Trusts and Trustees §862 (rev. 2d ed. 1995) (hereinafter Bogert); 4 Scott & Ascher §§24.2, 24.9, at 1659–1660, 1686; Second Restatement §197; see also </span></span><i><span class="Apple-style-span" style="font-family:verdana;"><span class="Apple-style-span" style="font-size:small;">Manhattan Bank of Memphis </span></span></i><span class="Apple-style-span" style="font-family:verdana;"><span class="Apple-style-span" style="font-size:small;">v. </span></span><i><span class="Apple-style-span" style="font-family:verdana;"><span class="Apple-style-span" style="font-size:small;">Walker</span></span></i><span class="Apple-style-span" style="font-family:verdana;"><span class="Apple-style-span" style="font-size:small;">, 130 U. S. 267, 271 (1889) (“The suit is plainly one of equitable cognizance, the bill being filed to charge the defendant, as a trustee, for a breach of trust”); 1 J. Perry, A Treatise on the Law ofTrusts and Trustees §17, p. 13 (2d ed. 1874) (common-law attempts “to punish trustees for a breach of trust in damages, . . . w[ere] soon abandoned”). </span></span></p> <p style="margin: 0.0px 0.0px 4.2px 0.0px; text-align: justify; text-indent: 11.0px; line-height: 13.3px; font: 11.0px 'Century Schoolbook'"><span class="Apple-style-span" style="font-family:verdana;"><span class="Apple-style-span" style="font-size:small;">The surcharge remedy extended to a breach of trust committed by a fiduciary encompassing any violation of aduty imposed upon that fiduciary. See Second Restatement §201; Adams 59; 4 Pomeroy §1079; 2 Story §§1261,1268. Thus, insofar as an award of make-whole relief is concerned, the fact that the defendant in this case, unlike the defendant in </span></span><i><span class="Apple-style-span" style="font-family:verdana;"><span class="Apple-style-span" style="font-size:small;">Mertens, </span></span></i><span class="Apple-style-span" style="font-family:verdana;"><span class="Apple-style-span" style="font-size:small;">is analogous to a trustee makes a critical difference. See 508 U. S., at 262–263. In sum, contrary to the District Court’s fears, the types of remedies the court entered here fall within the scope of theterm “appropriate equitable relief” in §502(a)(3).</span></span></p><p style="margin: 0.0px 0.0px 4.2px 0.0px; text-align: justify; text-indent: 11.0px; line-height: 13.3px; font: 11.0px 'Century Schoolbook'"><span class="Apple-style-span" style="font-family:verdana;"><span class="Apple-style-span" style="font-size:small;"><br /></span></span></p><p style="text-align: left;margin-top: 0px; margin-right: 0px; margin-bottom: 4.2px; margin-left: 0px; text-indent: 0px; line-height: 13.3px; font: normal normal normal 11px/normal 'Century Schoolbook'; "><span class="Apple-style-span" style="font-family:'times new roman';"><span class="Apple-style-span" style="font-size: medium;">What does it all mean? It means a huge victory for participants and beneficiaries bringing suit against ERISA plan fiduciaries who have breached their duties. For the first time, the Supreme Court has explicitly recognized that what would normally be characterized as "consequential damages" are an available remedy for breached of fiduciary duty under ERISA § 502(a)(3). This is a game changer for plaintiffs and a huge loss -- not a win -- for CIGNA.</span></span></p><p style="text-align: left;margin-top: 0px; margin-right: 0px; margin-bottom: 4.2px; margin-left: 0px; text-indent: 0px; line-height: 13.3px; font: normal normal normal 11px/normal 'Century Schoolbook'; "><span class="Apple-style-span" style="font-family:'times new roman';"><span class="Apple-style-span" style="font-size: medium;"><br /></span></span></p><p style="text-align: left;margin-top: 0px; margin-right: 0px; margin-bottom: 4.2px; margin-left: 0px; text-indent: 0px; line-height: 13.3px; font: normal normal normal 11px/normal 'Century Schoolbook'; "><span class="Apple-style-span" style="font-size: medium;"><span class="Apple-style-span" style="font-family:'times new roman';">Notably, t</span></span><span class="Apple-style-span" style="color: rgb(51, 51, 51); line-height: 21px; "><span class="Apple-style-span" style="font-size: medium;"><span class="Apple-style-span" style="font-family:'times new roman';">he Court also rejected CIGNA’s argument that plan beneficiaries must always show detrimental reliance to obtain relief for violations of ERISA's notice provisions, but the Court also emphasized that the class members were required to make at least some showing of actual harm</span></span></span><span class="Apple-style-span" style="font-size: small; color: rgb(51, 51, 51); line-height: 21px; "><span class="Apple-style-span" style="font-family:'times new roman';">.</span></span></p></div>
</p>If you find yourself struggling with your ERISA plan's administrator or insurer over your benefits (pension, disability, health, or otherwise), <a href="http://www.creitzserebin.com">let us see if we can help.</a> Anonymoushttp://www.blogger.com/profile/07166681289750524112noreply@blogger.com0tag:blogger.com,1999:blog-1240734950669422866.post-28354835932871898702011-03-31T11:05:00.000-07:002013-05-13T14:21:53.232-07:00<p class="MsoNormal" align="center" style="text-align: left;"><i style="mso-bidi-font-style: normal">Cyr v. Reliance Standard Life Insurance Co.</i>, Ninth Circuit Case No. 07-56869 (en banc) </p> <p class="MsoNormal">On March 22, 2011, an 11-judge en banc panel of the Ninth Circuit heard oral argument in this ERISA disability benefits suit in which I and Joseph Garofolo are co-counsel for the Plaintiff/Appellee, Laura Cyr.<span style="mso-spacerun:yes"> </span>The Ninth Circuit ordered hearing en banc pursuant to our petition.<span style="mso-spacerun:yes"> The court receives between 20 and 25 petitions for hearing (as distinct from rehearing) en banc every year, but normally none are granted. In fact, t</span>his is the only ERISA appeal of which we are aware that was heard en banc in the first instance (without a 3-judge panel decision) upon the petition of a party.<span> </span>The United States Secretary of Labor also filed a brief an amicus (aka "friend of the court") brief in support of Mrs. Cyr, and argued at the hearing. </p><p class="MsoNormal">The amicus brief of the Secretary of Labor can be found <a href="http://www.dol.gov/sol/media/briefs/Cyr(A)-11-10-2008.pdf">HERE </a></p><p class="MsoNormal"><span style="mso-spacerun:yes"></span></p><p class="MsoNormal"><span style="mso-spacerun:yes"></span></p> <p class="MsoNormal">A video of the hearing can be found <a href="http://www.ca9.uscourts.gov/media/view_subpage.php?pk_vid=0000006150">HERE</a></p><p class="MsoNormal">An audio recording of the hearing can be found <a href="http://www.ca9.uscourts.gov/media/view_subpage.php?pk_id=0000007227">HERE</a></p><p class="MsoNormal">The issue that the Ninth Circuit agreed to consider en banc was whether it should affirm, reverse or modify its precedent on one narrow question: who or what is a permissible defendant to a suit for benefits under ERISA, 29 U.S.C. § 1132(a)(1)(B)?<span style="mso-spacerun:yes"> </span>In <i style="mso-bidi-font-style: normal">Gelardi v. Pertec</i>, the Ninth Circuit wrote that section (a)(1)(B) permits suits only against an employee benefit plan as an entity.<span style="mso-spacerun:yes"> </span>761 F.2d 1323 (9th Cir. 1985).<span style="mso-spacerun:yes"> </span>Subsequently, the Ninth Circuit wrote that such suits may be brought against both a plan and its plan administrator (a term of art under ERISA § 3(16)), and left open the question whether or not a party functioning as a plan administrator could also be named.<span style="mso-spacerun:yes"> </span><i style="mso-bidi-font-style:normal">Everhart v. Allmerica</i>, 275 F.3d 751 (9th Cir. 2001).<span style="mso-spacerun:yes"> </span>In that case, Judge Reinhardt wrote an impassioned dissent arguing that any party with discretion over a claim determination should be subject to suit, and asserting that the panel should have referred the case for a hearing en banc to resolve a circuit circuit split.<span style="mso-spacerun:yes"> </span>Subsequently, in <i style="mso-bidi-font-style:normal">Ford v. MCI</i>, the Ninth Circuit, relying on <i style="mso-bidi-font-style:normal">Gelardi </i>and<i style="mso-bidi-font-style:normal"> Everhart</i>, held that only a plan may be sued, and that, categorically, the plan’s insurer is not a proper defendant.<span style="mso-spacerun:yes"> </span>399 F.3d 186 (9th Cir. 2005).</p> <p class="MsoNormal">In <i>Cyr</i>, the District Judge Dean Pregerson, in ruling in favor of Ms. Cyr on summary judgment, distinguished both <i style="mso-bidi-font-style:normal">Ford</i> and <i style="mso-bidi-font-style:normal">Everhart</i> on their facts, and held that Reliance was a proper defendant because it alone held ultimate authority to adjudicate benefits claims, and it alone shouldered the obligation to fund them.<span style="mso-spacerun:yes"> </span><i style="mso-bidi-font-style: normal">Cyr. V. Reliance</i>, 525 F. Supp. 2d 1165 (C.D. Cal 2007).<span style="mso-spacerun:yes"> </span>Reliance appealed that judgment on the basis that <i style="mso-bidi-font-style:normal">Ford</i> and <i style="mso-bidi-font-style:normal">Everhart</i> categorically insulate it from liability for benefits.<span style="mso-spacerun:yes"> </span>If its interpretation of those cases were correct, it would implicate a split amongst the circuits, a split within the Ninth Circuit, and possibly contravene the Supreme Court’s decisions in <i style="mso-bidi-font-style:normal">Harris Trust v. Solomon Smith Barney, Inc.,</i> 530 U.S. 238 (2000), and <i style="mso-bidi-font-style:normal">MetLife v. Glenn</i>, 554 U.S. 105 (2008).</p> <p class="MsoNormal">If the Ninth Circuit adopts the position advocated by Mrs. Cyr and the U.S. Secretary of Labor, it will abrogate <i style="mso-bidi-font-style: normal">Gelardi</i>, <i style="mso-bidi-font-style:normal">Ford</i>, and <i style="mso-bidi-font-style:normal">Everhart</i>, and hold that, on its face, 29 U.S.C. § 1132(a)(1)(B) admits no limit to the universe of proper defendants, and Reliance, as the party that adjudicated claims and funded the benefits, is a proper defendant to a claim for benefits under ERISA. <span style="mso-spacerun:yes"> </span>Notably, both Judge Reinhardt and the author of the <i style="mso-bidi-font-style:normal">Everhart</i> majority opinion, Judge Fisher, were on the <i style="mso-bidi-font-style:normal">Cyr</i> <i style="mso-bidi-font-style:normal">v. Reliance</i> en banc panel.<span style="mso-spacerun:yes"> </span></p><p class="MsoNormal">The pointed questions from the bench, especially from Judges Berzon and Smith, and Chief Judge Kozinski, imply that the court is inclined to adopt the Secretary's position. However, reading too much into the questions asked during an oral argument can be a risky proposition, so we'll have to wait until the court issues its opinion. A decision is expected later this year.</p><p class="MsoNormal"><o:p></o:p></p> <!--EndFragment--></p>If you find yourself struggling with your ERISA plan's administrator or insurer over your benefits (pension, disability, health, or otherwise), <a href="http://www.creitzserebin.com">let us see if we can help.</a> Anonymoushttp://www.blogger.com/profile/07166681289750524112noreply@blogger.com0tag:blogger.com,1999:blog-1240734950669422866.post-29505672616722846832008-08-12T12:11:00.000-07:002013-05-13T14:22:29.629-07:00Supreme Court's MetLife Decision Changes The Landscape for DiscoveryMetLife has been creating a lot of ERISA law lately, and not all of it helpful to insurers. <div><br /></div><div>Discovery in benefit denial cases has always been a trickier subject than it should be. Traditionally, in those cases in which the court evaluates claims administrators' decisions for an abuse of discretion, insurers and other defendants have long maintained that no discovery is appropriate because the job of the courts is merely to evaluate the administrative record to determine whether the administrators' decisions were rational (<span class="Apple-style-span" style="font-style: italic;">i.e.</span>, not an abuse of discretion).<div><br /></div><div>Plaintiffs (most often participants and beneficiaries of employer-sponsored heath insurance and disability insurance policies) maintained that at a minimum, they should be permitted to conduct discovery into whether the administrator had a conflict of interest that affected its decision making. An example might be where the individual who makes the claim determination gets a bonus tied to how many claims he or she rejects. Courts have long held that where there is such a conflict of interest, that the level of deference paid to the administrator's determination will be significantly attenuated. As a result, plaintiff's generally want to get as much discovery as possible related to the conflict.</div><div><br /></div><div>This battle played out in hundreds, if not thousands, of benefit cases in federal courts all over the country. In some courts some plaintiffs sometimes prevailed, but at the same time the approach of other federal courts has been to limit severely the scope of discovery available to plaintiffs in such cases.<br /><div><br /></div><div>In its recent decision in <span class="Apple-style-span" style="font-style: italic;">Metropolitan Mutual Life Insurance Co. v. Glenn</span>, 128 S. Ct. 2343 (2008), the Court held that whenever the same entity is required to make the claims decision and also to pay the claim, there is always a conflict of interest. The Court specifically suggested, <span class="Apple-style-span" style="font-style: italic;">inter alia</span>, that trial courts might consider an insurer's "history of biased claims administration," whether the administrator "has taken active steps to reduce potential bias and promote accuracy," and whether the administrator has imposed "management checks that penalize inaccurate decisionmaking, irrespective of whom the inaccuracy benefits." <span class="Apple-style-span" style="font-style: italic;">Id.</span> at 2351.</div><div><br /></div><div>Though one might have thought this would resolve the issue once and for all, just two weeks ago I had an insurer's attorney express to the court at a case management conference that, in light of the <span class="Apple-style-span" style="font-style: italic;">MetLife</span> decision, no discovery is appropriate because her client (also MetLife), as both the payor and the decision-maker, was conflicted as a matter of law, and no further inquiry was required.</div><div><br /></div><div>That's an interesting position, but the one post-<span class="Apple-style-span" style="font-style: italic;">MetLife</span> court that has considered it has rejected it, and adopted the position that discovery that is reasonably calculated to lead to the discovery of admissible evidence of the scope and effect of an insurer's conflict is appropriate. In <span class="Apple-style-span" style="font-style: italic;">Hogan-Cross v. Metropolitan Life Insurance Co.</span>, --- F. Supp. 2d ---, 2008 WL 2938056 (S.D.N.Y. 2008), the court could not have expressed my sentiments better: "[E]ach case must be considered on its own merits. Blunderbuss attempts to cut of discovery on the ground that it never or rarely should be permitted in [ERISA benefit denial] cases, whatever their merits before Glenn, no longer have merit." <span class="Apple-style-span" style="font-style: italic;">Id.</span> at *4.</div><div><br /></div><div>Blunderbuss is such a great word.</div></div></div></p>If you find yourself struggling with your ERISA plan's administrator or insurer over your benefits (pension, disability, health, or otherwise), <a href="http://www.creitzserebin.com">let us see if we can help.</a> Anonymoushttp://www.blogger.com/profile/07166681289750524112noreply@blogger.com0tag:blogger.com,1999:blog-1240734950669422866.post-65376151975660418922008-06-16T13:59:00.000-07:002013-05-13T14:22:15.014-07:00Welcome to "an eye single"Allow me to introduce you to my ERISA blog. ERISA was enacted by congress to reconcile a number of competing policy interests, but principally to mandate duties, procedures, and practices that would protect the assets of employee benefit plans from mismanagement and malfeasance. I've been working primarily in matters relating to the Employee Retirement Income Security Act of 1974, as amended, since 1995.<br /><br />There are some particularly unfortunate aspects of the way ERISA was drafted and has come to be interpreted over the years. For example, the lack of a punitive remedy for bad faith denials of benefits by self-serving insurance companies has caused virtually every major health and disability insurer in the U.S. to adopt practices designed to repel contractually valid benefit claims, purely for profit. [Under state law, insurers frequently face punitive damages for bad faith denial of claims; under ERISA, those same insurers will never have to pay more than the insurance benefit they would have to pay if they honored their insurance contract. So they delay and obfuscate as long as possible in order to keep their money, and wear down their insureds] Another example is the Supreme Court's consistent interpretation of the phrase "other appropriate equitable relief" in ERISA section 502(a)(3) to mean "remedies that were available in British courts of equity." We continue to believe that a more appropriate interpretation of "equitable" in that connection is "fair," but we're not Supreme Court Justices, and we have to work with what they give us.<br /><br />On the other hand, ERISA continues to create some incredibly powerful protections for employees: the ability to obtain the equivalent of class relief under 502(a)(2) without the necessity of a burdensome class action law suit; a claim regulation promulgated by the D.O.L. that mandates a set of practices and procedures for communicating with employees such that they can actually understand what their insurers are telling them; strict liability for self-dealing under ERISA section 406; and let's not forget ERISA's fiduciary duties generally: the highest duties known to the law. Indeed, the name of this blog derives from the Second Circuit's seminal 1982 decision in <i>Donovan v. Bierwirth</i>, holding that a fiduciary must act “<span style="font-weight: bold;">with an eye single</span> to the interests of the participants and beneficiaries.” 680 F.2d 263 (2nd Cir. 1982)(emphasis added).<br /><br />This blog will explore current developments in ERISA jurisprudence, issues we face in our practice, and serve as a forum for discussion of same. I hope you come back for more.</p>And if you find yourself struggling with your ERISA plan's administrator or insurer over your benefits (pension, disability, health, or otherwise), <a href="http://www.creitzserebin.com">let us see if we can help.</a> Anonymoushttp://www.blogger.com/profile/07166681289750524112noreply@blogger.com0