Justia Civil Procedure Opinion Summaries

Knox-Bender suffered injuries from a car accident. She sought medical treatment at Methodist Healthcare. Methodist billed her $8,000 for the treatment. Payments to Methodist were made on Knox-Bender’s behalf by her employer-sponsored healthcare plan, her automobile insurance plan, and her husband’s healthcare plan. Knox-Bender says that the insurance plans had already agreed with Methodist on the price of her care. She claims that, despite this agreement, Methodist overcharged her and that this was common practice for Methodist. She and a putative class of other patients, sued in Tennessee state court. During discovery, Methodist learned that Knox-Bender’s husband’s healthcare plan was an ERISA plan, 29 U.S.C.1001(b) that covered $100 of her $8,000 bill. Methodist removed the case to federal court claiming complete preemption under ERISA. The district court denied Knox-Bender’s motion to remand and entered judgment in favor of Methodist. The Sixth Circuit reversed. The complete preemption of state law claims under ERISA is “a narrow exception to the well-pleaded complaint rule.” Methodist has not met its burden to show that Knox-Bender’s complaint fits within that narrow exception. Since Knox-Bender has not alleged a denial of benefits under her husband’s ERISA plan, ERISA does not completely preempt her claim. Even if Methodist had shown that Knox-Bender alleged a denial of benefits, it would also have show that Knox-Bender complained only of duties breached under ERISA, not any independent legal duty. View "K.B. v. Methodist Healthcare - Memphis Hospitals" on Justia Law

Fessenden’s employment was terminated after he began receiving short-term disability benefits. He then applied for long‐term disability benefits through his former employer’s benefits plan. The plan administrator, Reliance, denied the claim. Fessenden submitted a request for review with additional evidence supporting his diagnosis of Chronic Fatigue Syndrome. When Reliance failed to issue a decision within the timeline mandated by regulations governing the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1132, he filed suit. Eight days later, Reliance finally issued a decision, again denying Fessenden’s claim. The district court granted Reliance summary judgment. The Seventh Circuit vacated. If the decision had been timely, the court would have applied an arbitrary and capricious standard because the plan gave Reliance the discretion to administer it. When a plan administrator commits a procedural violation, however, it loses the benefit of deference and a de novo standard applies. The court rejected Reliance’s argument that it “substantially complied” with the deadline because it was only a little bit late. The “substantial compliance” exception does not apply to blown deadlines. An administrator may be able to “substantially comply” with other procedural requirements, but a deadline is a bright line. View "Fessenden v. Reliance Standard Life Insurance Co." on Justia Law

Michael Easterday (“Decedent”) and Colleen Easterday (“Easterday”) married in 2004. Prior to marriage, Decedent worked for Federal Express and became a participant in a pension plan established by this former employer. He also purchased a $250,000 life insurance policy. Decedent designated Easterday the beneficiary of both during their marriage. The parties separated in 2013, and ultimately filed for divorce under section 3301(c) of the Pennsylvania Divorce Code, which provided for a divorce by mutual consent of the parties. She and Decedent subsequently settled their economic claims in a property settlement agreement (“PSA”) executed December, 2013. Pertinent here, the PSA provided that the parties would each retain "100% of their respective stocks, pensions, retirement benefits, profit sharing plans, deferred compensation plans, etc. and shall execute whatever documents necessary to effectuate this agreement." The issue this case presented was one of first impression for the Pennsylvania Supreme Court, namely, the interplay between provisions of the Divorce Code, the Probate, Estates and Fiduciaries Code, and the Rules of Civil Procedure. An ancillary issue centered on whether ERISA preempted a state law claim to enforce a contractual waiver to receive pension benefits by a named beneficiary. It was determined Decedent’s affidavit of consent was executed more than thirty days prior to the date it was submitted for filing (and rejected). The Superior Court ruled that because the local Prothonotary rejected the filing of Decedent’s affidavit of consent due to a lack of compliance with Rule 1920.42(b)(2)’s thirty-day validity requirement, grounds for divorce had not been established in accordance with section 3323(g)(2) of the Divorce Code at the time of Decedent’s death. Because the Decedent’s affidavit of consent was not filed, section 6111.2 of the PEF Code did not invalidate Easterday’s designation as the beneficiary of Decedent’s life insurance policy. Furthermore, the Superior Court determined ERISA did not preempt the state law breach of contract claim to recover funds paid pursuant to an ERISA-qualified employee benefit plan. The Pennsylvania Supreme Court affirmed the Superior Court's judgment. View "In Re: Estate of Easterday" on Justia Law

The Eighth Circuit affirmed the district court's grant of ex-wife's motion to dismiss an action brought by ex-husband, alleging violations of the anti-alienation provisions of the Employee Retirement Income Security Act of 1974 (ERISA), that arose from payments he made to her for almost three decades. The court held that a prior state court judgment was entitled to res judicata effect where ex-husband had an opportunity to litigate the question of whether the state court had jurisdiction to address his violations of ERISA claims. View "Schwartz v. Bogen" on Justia Law

Caroline Burton and Brenda Olivar submitted claims for long-term disability benefits to insurance companies under employee-benefits plans set up by their employers (“the Plans”). The insurance companies denied Burton’s and Olivar’s claims. Burton and Olivar sued the Plans under the Employee Retirement Income Security Act (“ERISA”) for benefits due to them under the insurance policies. But neither served the Plans. Rather, they each served complaints on the United States Department of Labor Secretary, relying on an ERISA provision allowing such service when a plan hasn’t designated “an individual” as an agent for service of process. In both cases, the Labor Secretary never forwarded the complaint to the Plans’ designated agents for service of process, the Plans failed to answer, and Burton and Olivar obtained default judgments in their favor. Eventually, the Plans moved to set aside the default judgments for improper service, which the trial courts granted in both cases. Later, the Plans moved for summary judgment, arguing the insurers, which were obligated to make all eligibility determinations and payments under the Plans’ terms, were the only proper party defendants. The trial courts agreed, granting the Plans summary judgment. A division of the court of appeals affirmed. The issue presented to the Colorado Supreme Court for resolution centered on whether ERISA’s use of the term “individual” provided that service on the Labor Secretary was sufficient when a plan designates a corporation (instead of a natural person) as its administrator and agent for service of process. Finding no reversible error in the district court’s judgment, the Supreme Court affirmed. View "Burton v. Colorado Access & No." on Justia Law

Plaintiff-appellant Elizabeth Cates was a former patient of defendant-appellee Integris Health, Inc.’s medical facility and claimed defendant wrongfully billed her, and others like her, for services. She filed this action in state court, alleging state-law claims for breach of contract, violation of the Oklahoma Consumer Protection Act, and deceit. Defendant successfully moved to dismiss these claims on the ground that they were expressly preempted by the federal Employee Retirement Income Security Act. On appeal, the Oklahoma Supreme Court reversed and held that plaintiff’s claims were not preempted. The case was returned to the trial court for further proceedings. View "Cates v. Integris Health, Inc." on Justia Law

Life Insurance Company of North America’s terminated plaintiff-appellant Carl Van Steen’s long-term disability benefits under Lockheed Martin’s ERISA Plan. Life Insurance Company of North America (LINA) appealed the district court’s finding that its decision to terminate Van Steen’s benefits was arbitrary and capricious. Van Steen, in turn, appealed the district court’s denial of his attorney’s fees request. Van Steen was physically assaulted during an altercation while walking his dog. The assault resulted in a mild traumatic brain injury (mTBI) that impacted Van Steen’s cognitive abilities that prevented him from returning to full time work; Van Steen was eventually allowed to return to part-time work on a daily basis roughly six weeks later. Even on a part-time schedule, Van Steen experienced cognitive fatigue and headaches that required him to frequently rest. Due to his inability to stay organized and keep track of deadlines after the assault, Van Steen received poor feedback on his job performance. Van Steen’s claim for partial long-term disability benefits was approved on March 30, 2012. Roughly a year later, LINA reviewed Van Steen’s file, contacted his doctors, and confirmed that Van Steen’s condition and restrictions were permanent as he was “not likely to improve.” Despite this prognosis, LINA sent Van Steen a letter one week later terminating his long-term disability benefits, explaining that “the medical documentation on file does not continue to support the current restrictions and limitations to preclude you from resuming a full-time work schedule.” Having exhausted his administrative appeals under the Plan, Van Steen next sought relief before the district court. The district court reversed LINA’s decision to terminate Van Steen’s partial long-term disability benefits on the grounds that it was arbitrary and capricious, but denied Van Steen’s request for attorney’s fees. The Tenth Circuit agreed with the district court’s reversal of LINA’s decision to terminate Van Steen’s coverage. The Court also found that Van Steen was not eligible for attorney fees: “Van Steen’s arguments fail to convince us that the district court’s decision was based on a clear error of judgment or exceeded the bounds of permissible choice.” View "Van Steen v. Life Insurance Company N.A." on Justia Law

Babin, employed by Quality, developed carpal tunnel syndrome and had several surgeries. Three months after he returned to work, his employment ended. Babin participated in Quality’s employee benefit plan, which provided short- and long-term disability benefits, governed by the Employee Retirement Income Security Act (ERISA). Babin submitted a short-term disability benefits application to Standard, Quality’s insurer. In February 2013, Standard denied Babin’s claim because it had not received a necessary form from Quality. Babin alleges that he provided that form to Quality, which failed to complete it. In February 2014, Babin’s counsel asked Quality for disability plan documents. Babin claims that Quality did not send those documents before he filed suit, that he believed that the short-term plan provided six months of benefits, and, had he known that the plan only provides three months of benefits, he would have applied for long-term benefits; Quality’s failure to produce the documents caused him to miss the window for long-term benefits. Babin filed suit 20 months after requesting the documents, alleging failure to produce documents and failure to pay benefits. The parties settled the denial-of-benefits claim. The court held that Louisiana’s one-year prescriptive period for delictual claims applies to 29 U.S.C. 1132(c) claims, so Babin’s claim was time-barred. The Fifth Circuit affirmed, rejecting Babin’s argument that Louisiana’s 10-year prescriptive period for personal actions should govern his claim for failure to produce documents. View "Babin v. Quality Energy Services, Inc." on Justia Law

The Supreme Court reversed the judgment of the district court granted summary judgment for New West Health Services (New West) in this action brought by Plaintiff and the class she represented alleging breach of contract, violation of made-whole rights, and unfair claims settlement practices. At issue in this appeal was the district court’s grant to New West leave to amend its answer to include the affirmative defense of ERISA preemption. The district court subsequently allowed Plaintiff to amended her complaint to include ERISA claims. Ultimately, the district court concluded that ERISA preemption required dismissal of Plaintiff’s state law and ERISA claims and entered summary judgment for New West. The Supreme Court reversed, holding that, under the extraordinary circumstances of this case, the district court abused its discretion by granting New West leave to amend its answer to assert ERISA preemption. View "Rolan v. New West Health Services" on Justia Law

This case arose out of an underlying action to enforce the health benefits provisions of two court-approved settlement agreements. The Fourth Circuit affirmed the district court's denial of plaintiffs' motion for a preliminary injunction. The court held that a motion for preliminary injunction filed before the act to be enjoined has occurred, and subsequently intended to restore the status quo once it has been disturbed, was not moot. The court also held that the district court had jurisdiction over plaintiffs' claim pursuant to Section 502(a)(1)(B) of the Employee Retirement Income Security Act (ERISA). On the merits, the court held that the district court did not abuse its discretion in finding that plaintiffs failed to demonstrate a likelihood of success on the merits; that they were likely to suffer irreparable harm without a preliminary injunction; and that the balance of the equities and the public interest favor an injunction. View "Di Biase v. SPX Corp." on Justia Law