Fifth DCA Reverses Dismissal Based Upon ERISA Preemption

In Universal Checks & Forms, Inc., et al. v. Pencor, Inc. (5D12-3593), the Fifth District Court of Appeal reversed the trial court's judgment of dismissal based upon ERISA preemption. The court stated that "Universal filed a complaint for breach of fiduciary duty and negligence in connection with Pencor’s recommendation and sale to Universal of a defined benefit plan. According to the complaint, Pencor failed to disclose a critical feature of the defined benefit plan, namely, the impact of the age of employees on those employees’ share of the plan…It is Universal’s position that Pencor recommended a defined benefit plan that was unsuitable for Universal. The complaint requested compensatory damages of no less than $80,000, disgorgement of commissions, prejudgment interest, costs, and fees." "Pencor moved to dismiss the complaint on the basis that the claims were preempted by ERISA. The motion was granted and the trial court entered a final judgment of dismissal." 

The court noted that "in enacting ERISA, Congress intended to make the regulation of pension plans solely a federal concern. Firestone Tire & Rubber Co. v. Neusser, 810 F.2d 550, 552 (6th Cir. 1987). Consequently, ERISA preempts 'any and all State laws insofar as they may now or hereafter relate to any employee benefit plan . . . .' 29 U.S.C. § 1144(a)."

"Initially, the Supreme Court gave a broad dictionary interpretation to the 'relate to' preemption language, stating that a law 'relates to' an employee benefit plan 'if it has a connection with or reference to such a plan.' Shaw, 463 U.S. at 96-97. However, the Shaw court also recognized that some state actions may affect employee benefit plans 'in too tenuous, remote, or peripheral a manner to warrant a finding that the law ‘relates to’ the plan.' Id. at 100 n.21." 

The court concluded:

In the instant case, we do not believe that permitting Universal to proceed with its action against Pencor would, in any way, interfere with Congress’s intent to ensure that plans and plan sponsors are subject to a uniform body of benefits law. Universal is not asserting wrongdoing in the administration of the employee benefit plan, nor is it challenging the terms and conditions of the plan as created. Rather, Universal is alleging that Pencor engaged in tortious conduct by recommending that Universal create an employee benefit plan as a retirement investment vehicle and tax shelter. The recommendation, and the tortious conduct allegedly associated with it, necessarily occurred before the plan was even formed.

Therefore, the court reversed the dismissal.

Funds Not Property Of ERISA Plan Until Remitted To Plan

In Pantoja v. Zengel (12-11036), the Eleventh Circuit affirmed the trial court's judgment that the money at issue was not an asset of the ERISA plan where the money had never been given to the ERISA plan. The court held:

Upon examination of the Plan documents, we find no clear and specific language indicating the fringe benefits are “plan assets” before they are actually remitted to the Plan. Indeed, unlike the plan documents in ITPE Pension Fund, this contract is not even susceptible to such a reading. See 334 F.3d at 1016. Without clear language or any evidence indicating otherwise, we conclude that the unpaid funds cannot be construed as plan assets; therefore, the Appellees did not breach a fiduciary duty as a matter of law.

Eleventh Circuit Affirms ERISA Order Relating To Plan's Subrogation Provision

In Zurich American Ins. Co. v. O'Hara (08-16875), the Eleventh Circuit released a published opinion and affirmed the trial court's order in favor of Zurich and requiring the appellant to reimburse the insurer.  The court outlined the facts as follows:

On 22 February 2005, O’Hara, a beneficiary and covered person under the Plan, sustained serious bodily injuries when the car he was driving was struck head-on by a large pick-up truck. Following the accident, the Plan paid $262,611.92 in medical expenses on O’Hara’s behalf. O’Hara later sued the other driver, and the parties to that action settled for $1,286,457.11.1

After learning of O’Hara’s third-party recovery, Zurich attempted to collect the $262,611.92 from O’Hara pursuant to the Plan’s subrogation and reimbursement provision. 

As to the law, the court stated:

ERISA § 502(a)(3) authorizes a plan fiduciary to bring a civil action “to enjoin any act or practice which violates any provision of this subchapter or the terms of the plan, or . . . to obtain other appropriate equitable relief (i) to redress such violations or (ii) to enforce any provisions of this subchapter or the terms of the plan.” 29 U.S.C. § 1132(a)(3) (2009). O’Hara argues that enforcement of the reimbursement and subrogation provision is not “appropriate” because he was not made whole by his third-party recovery.

“Under the make-whole doctrine, an insured who has settled with a third-party tortfeasor is liable to the insurer-subrogee only for the excess received over the total amount of his loss.” Cagle v. Bruner, 112 F.3d 1510, 1520 (11th Cir. 1997).

***

O’Hara contends that, as a matter of equity and in order to effectuate ERISA’s policy of protecting plan beneficiaries, the make-whole rule must be applied because allowing Zurich to recoup the medical expenses it paid on his behalf unduly punishes him by requiring him to forfeit a substantial portion of the compensation he received for his other losses, including future wages and bodily integrity, and unjustly enriches Zurich. We disagree.

Applying federal common law to override the Plan’s controlling language, which expressly provides for reimbursement regardless of whether O’Hara was made whole by his third-party recovery, would frustrate, rather than effectuate, ERISA’s “repeatedly emphasized purpose to protect contractually defined benefits.” Massachusetts Mut. Life Ins. Co. v. Russell, 473 U.S. 134, 148, 105 S. Ct. 3085, 3093 (1985)...Applying federal common law to deny an employer its right to reimbursement pursuant to a written plan would also frustrate ERISA’s purposes by “discourag[ing] employers from offering welfare benefit plans in the first place.” Varity Corp. v. Howe, 516 U.S. 489, 497, 116 S. Ct. 1065, 1070 (1996).

***

O’Hara appeals the district court’s order granting summary judgment in favor of Zurich and ordering O’Hara to reimburse Zurich for the medical expenses the Plan paid on O’Hara’s behalf. Because full reimbursement according to the terms of the Plan’s clear and unambiguous subrogation provision is necessary not only to effectuate ERISA’s policy of preserving the integrity of written plans but to protect the interests and expectations of all plan participants and beneficiaries, such relief is both “appropriate” and “equitable” under ERISA § 502(a)(3).

 The briefs can be found at the following links:

*Initial Brief;

*Answer Brief;

*Reply Brief.

Eleventh Circuit Affirms Judgment Based Upon Statute of Limitations In ERISA LTD Case

The Eleventh Circuit had two decisions relating to the statute of limitation in claims for long term disability benefits under ERISA. In Knight v. Unum Provident Insurance Co. (09-13653), the Eleventh Circuit affirmed the entry of a summary judgment against Unum based upon the plaintiff's failure to file her lawsuit within the controlling statute of limitation. The brief facts were provided by the court as follows:

The policy stated that a policyholder could commence “legal action regarding [a] claim 60 days after proof of claim has been given and up to 3 years from the time proof of claim is required, unless otherwise provided under federal law.” Knight received short term disability benefits for her absences from work caused byallergic reactions to latex between October 2001 and May 2002. In June 2002, Knight’s claim was transferred to Unum’s long term disability division. On September 30, 2002, Unum denied Knight long term disability benefits beyond June 25, 2002. Knight appealed and, on December 13, 2002, Unum extended Knight’s benefits to December 5, 2002. Knight did not challenge Unum’s decision.

In 2005, Unum notified Knight that she could fill out a form for a reassessment of her long term disability claim.  "On October 17, 2006, Unum notified Knight that she was entitled to long term disability benefits between December 6, 2002, and July 24, 2003."....."On September 17, 2008, Knight filed a complaint that Unum had “breach[ed] [its] fiduciary duty and impair[ed] the obligation of contract under the Employment Retirement Income Security Act” by denying her long term disability benefits after July 24, 2003."

The Eleventh Circuit agreed with the district court that the complaint was untimely:

The district court ruled that Knight commenced her action to recover unpaid benefits after the period of limitation had expired.

Knight argues that her complaint was timely, but we disagree. Knight’s policy imposed a three-year statute of limitation for her to file an a complaint about the denial of disability benefits, and Knight does not argue that period of time is unreasonable. See Northlake Reg’l Med. Ctr. v. Waffle House Sys. Employee Benefit Plan, 160 F.3d 1301, 1303–04 (11th Cir. 1998). Knight commenced her action after the statute of limitation expired.

In Ehmann v. Continental Casualty Company (09-11615), the Eleventh Circuit reversed the grant of summary judgment to Ehmann because the statute of limitation had expired when the suit was filed.  The court noted that it did not matter if the contractual language controlled or a longer statutory limitatio period.  Either way, the deadline had been missed.

Supreme Court Grants Certiorari In An ERISA Case, An Eleventh Circuit Case & Three Others

The Supreme Court granted certiorari in five cases today, including one from the Eleventh Circuit and one relating to ERISA.  The SCOTUS Blog's summary is below:

Docket: 09-337

Title: Krupski v. Costa Crociere S.P.A.

Issue: Whether Fed. R. Cir. P. 15(c)(1)(C) – which permits an amended complaint to “relate back,” for limitation purposes, when the amendment corrects a “mistake concerning the proper party’s identity” – permits “mistakes” where the plaintiff had imputed knowledge of the identity of the added defendant prior to filing suit.

• Opinion below (11th Circuit)
• Petition for certiorari
• Brief in opposition
  

Docket: 09-448

Title: Hardt v. Reliance Standard Life Insurance Company

Issues: (1) Whether ERISA § 502(g)(1) provides a district court with discretion to award reasonable attorney’s fees only to a prevailing party; and (2) whether a party is entitled to attorney’s fees pursuant to § 502(g)(1) when she persuades a district court that a violation of ERISA has occurred, successfully secures a judicially ordered remand requiring a redetermination of entitlement to benefits, and subsequently receives the benefits sought on remand.

• Opinion below (4th Circuit)
• Petition for certiorari
• Brief in opposition
• Petitioner’s reply

Docket: 09-475

Title: Monsanto Company v. Geertson Seed Farms

Issues: (1) Whether plaintiffs under the National Environmental Policy Act are specially exempt from the requirement of showing a likelihood of irreparable harm to obtain an injunction; (2) whether a district court may enter an injunction sought to remedy a NEPA violation without conducting an evidentiary hearing sought by a party to resolve genuinely disputed facts directly relevant to the appropriate scope of the requested injunction; and (3) whether the Ninth Circuit erred when it affirmed a nationwide injunction that sought to remedy a NEPA violation based on only a remote possibility of reparable harm.

• Opinion below (9th Circuit)
• Petition for certiorari
• Brief in opposition of Geertson Seed Farms
• Brief in opposition of the federal respondent
• Petitioner’s reply
• Amicus brief of the American Farm Bureau Federation et al.
• Amicus brief of the Washington Legal Foundation
• Amicus brief of Phytagro

Docket: 09-497

Title: Rent-A-Car, West, Inc. v. Jackson

Issue: Whether the district court is in all cases required to determine claims that an arbitration agreement subject to the Federal Arbitration Act (“FAA”) is unconscionable, even when the parties to the contract have clearly and unmistakably assigned this “gateway” issue to the arbitrator for decision.

• Opinion below (9^th Circuit)
• Petition for certiorari
• Brief in opposition
• Amicus brief of the Pacific Legal Foundation

Docket: 09-559

Title: John Doe #1 v. Reed

Issues: (1) Whether the First Amendment right to privacy in political speech, association, and belief requires strict scrutiny when a state compels public release of identifying information about petition signers; and (2) whether compelled public disclosure of identifying information about petition signers is narrowly tailored to a compelling interest.

• Opinion below (9th Circuit)
• Petition for certiorari
• Brief in opposition for Secretary of State Sam Reed
• Brief in opposition for Washington Families Standing Together
• Petitioner’s reply

The Court's order can be viewed HERE.

ERISA Removal, Provider Claims, Assignment Of Benefits & Davila In The Eleventh Circuit

In Connecticut State Dental v. Anthem Health Plans, Inc., - F.3d -, No. 08-15268, 2009 WL 5126236 (11th Cir. Dec. 30, 2009), the Eleventh Circuit released a published decision and reviewed a decision denying a motion to remand.  The court went into great detail about the two types of preemption, assignment of benefits under ERISA, healthcare provider claims, and among other issues, the test mandated by Aetna Health Inc. v. Davila, 542 U.S. 200, 210, 124 S. Ct. 2488, 2496 (2004).  In its analysis, the court notes the analysis previously applied in the Eleventh Circuit was changed by Davila.  This is an exceptionally long post but it is also a very detailed opinion.  The citation links below are to the Google Scholar version of the respective opinions.  [Update: In addition to this post, Roy Harmon at the Health Plan Law Blog posted an entry on January 6, 2010 about this case which can be found HERE.]

On a motion to remand, the removing party bears the burden of showing the existence of federal subject matter jurisdiction....Because Plaintiffs’ complaints allege only state law claims, there is no jurisdiction under the well-pleaded complaint rule....Complete preemption is a narrow exception to the well-pleaded complaint rule and exists where the preemptive force of a federal statute is so extraordinary that it converts an ordinary state law claim into a statutory federal claim....

ERISA is one of only a few federal statutes under which two types of preemption may arise: conflict preemption and complete preemption....Complete preemption, also known as super preemption, is a judiciallyrecognized exception to the well-pleaded complaint rule. It differs from defensive preemption because it is jurisdictional in nature rather than an affirmative defense...Complete preemption under ERISA derives from ERISA’s civil enforcement provision, § 502(a), which has such “extraordinary” preemptive power that it “converts an ordinary state common law complaint into one stating a federal claim for purposes of the well-pleaded complaint rule.” Taylor, 481 U.S. at 65-66, 107 S. Ct. at 1547. Consequently, any “cause[] of action within the scope of the civil enforcement provisions of § 502(a) [is] removable to federal court.” [emphasis added].

For a number of years, this Court has applied the four-part test for ERISA complete preemption set forth in Butero v. Royal Maccabees Life Insurance Co., 174 F.3d 1207 (11th Cir. 1999)....A few years after Butero was decided, the Supreme Court [decided Aetna Health Inc. v. Davila, 542 U.S. 200, 210, 124 S. Ct. 2488, 2496 (2004).]  The Davila test thus requires two inquiries: (1) whether the plaintiff could have brought its claim under § 502(a); and (2) whether no other legal duty supports the plaintiff’s claim. While similar to the Butero test, Davila refines Butero by inquiring about the existence of a separate legal duty, which is not a consideration under Butero.

***

First, healthcare provider claims are usually not subject to complete preemption because “[h]ealthcare providers . . . generally are not considered ‘beneficiaries’ or ‘participants’ under ERISA.”...Moreover, such claims often are not the type of claims that could be brought under § 502(a) because they do not “duplicate[], supplement[], or supplant[] the ERISA civil enforcement remedy.”....Second, it is well-established in this and most other circuits that a healthcare provider may acquire derivative standing to sue under ERISA by obtaining a written assignment from a “participant” or “beneficiary” of his right to payment of medical benefits....Claims for benefits by healthcare providers pursuant to an assignment are thus within the scope of § 502(a).....Finally, a provider that has received an assignment of benefits and has a state law claim independent of the claim arising under the assignment holds two separate claims. In such a case, the provider may assert a claim for benefits under ERISA, the state law claim, or both....Thus, so long as the provider’s state law claim does not fall within § 502(a), the existence of the assignment is irrelevant to complete preemption if the provider asserts no claim under the assignment.

The Third, Fifth, and Ninth Circuits have applied these principals to determine the line of demarcation between ERISA and state law claims in actions brought by healthcare providers....

In Blue Cross of California v. Anesthesia Care Associates Medical Group, Inc., 187 F.3d 1045 (9th Cir. 1999), the Ninth Circuit held that healthcare providers’ claims for breach of their provider agreements with Blue Cross were not completely preempted, even though they had received assignments from patients who were beneficiaries of ERISA plans.  The providers’ agreements with Blue Cross required Blue Cross to identify providers in the information it distributed to members of the plan and to direct members to those providers. Id. at 1048. In return, the providers agreed to accept payment from Blue Cross for the services they rendered pursuant to specified fee schedules. Id. After Blue Cross changed the fee schedules, the providers filed a class action in state court alleging that Blue Cross breached the provider agreements by improperly amending the fee schedules and by violating its implied duty of good faith and fair dealing under California law.  On appeal [after the district court granted a motion to remand], the Ninth Circuit held that the providers’ breach of contract claims were not within the scope of § 502(a)(1)(B) because the providers’ breach of contract claims arose solely out of their provider agreements. In other words, the claims were not claims for benefits that could be asserted by the patients-assignors. The Ninth Circuit differentiated the breach of provider contract claims from assignment-based ERISA claims as follows:

[T]he Providers are asserting contractual breaches, and related violations of the implied duty of good faith and fair dealing, that their patient-assignors could not assert: the patients simply are not parties to the provider agreements between the Providers and Blue Cross. The dispute here is not over the right to payment, which might be said to depend on the patients’ assignments to the Providers, but the amount, or level, of payment, which depends on the terms of the provider agreements.

Id. at 1051 (emphasis in original). Because the providers’ state law claims arose out of separate agreements with Blue Cross that governed their provision of goods and services to plan members, the assignments were irrelevant to preemption.

The Third Circuit, in Pascack Valley Hospital, Inc. v. Local 464A UFCW Welfare Reimbursement Plan, 388 F.3d 393 (3d Cir. 2004), a post-Davila case, found no preemption under facts similar to those in Anesthesia Care.......

In a recent decision, Lone Star OB/GYN Associates v. Aetna Health Inc., 579 F.3d 525 (5th Cir. 2009), the Fifth Circuit adopted the Ninth Circuit’s “rate of payment” versus “right of payment” test for distinguishing a provider’s state law contract-based claims from a claim for benefits under ERISA......

We agree with these courts that the “rate of payment” and “right of payment” distinction is a useful means for assessing preemption of healthcare provider claims based upon a breach of an agreement separate from an ERISA plan and thus apply it in considering Rutt and Egan’s claims. [emphasis added].

***

The first inquiry is whether Rutt and Egan, “at some point in time, could have brought [their] claim under ERISA § 502(b)(1)(B).”  Davila, 542 U.S. at 210, 124 S. Ct. at 2496. This part of the test is satisfied if two requirements are met: (1) the plaintiff’s claim must fall within the scope of ERISA; and (2) the plaintiff must have standing to sue under ERISA....

Rutt and Egan argue that their claims are not cognizable under § 502(a) because the relief they seek is unavailable under ERISA. They stress that they are not seeking benefits under an ERISA plan, but instead seek to collect unpaid amounts they are owed under their Provider Agreements as a result of Anthem’s use of improper payment methods, such as downcoding and bundling, under the guise of utilization review.  Moreover, they assert, their state law claims are the types of claims federal courts have consistently held are not even defensively preempted under ERISA § 514. The Court emphasized in Davila, however, that merely referring to labels affixed to claims to distinguish between preempted and non-preempted claims is not helpful because doing so “would ‘elevate form over substance and allow parties to evade’ the pre-emptive scope of ERISA.” Davila, 542 U.S. at 214, 124 S. Ct. at 2498 (quoting Allis-Chalmers Corp. v. Lueck, 471 U.S. 202, 211, 105 S. Ct. 1904, 1911 (1985)). [emphasis added]......Yet, a closer look [at the Plaintiffs' complaint] discloses more. Plaintiffs’ allegations implicate not only the “rate of payment” under their Provider Agreements, but also the “right of payment.”

What we have, then, is really a hybrid claim, part of which is within § 502(a) and part of which is beyond the scope of ERISA. Because Rutt and Egan complain, at least in part, about denials of benefits and other ERISA violations, their breach of contract claim implicates ERISA. [emphasis added].

Rutt and Egan must have had standing to assert ERISA claims, and because they are providers, they could only have derivative standing through assignments. Thus, unlike Anesthesia Care, supra, the existence of assignments does matter in this case. In the district court, Anthem presented claim forms that Rutt and Egan submitted to Anthem for reimbursement for dental services. Lynn Appicelli, a Project Manager in Anthem’s Government Programs division, confirmed in an affidavit that the attached forms were typical of claim forms that Anthem receives from Connecticut dentists. The claim forms contain the following language: “I hereby authorize payment of the dental benefits otherwise payable to me directly to the below named dental entity.” Anthem contends that these claim forms suffice to show an assignment of benefits by Rutt’s and Egan’s patients. We agree.

***

The second inquiry is whether Rutt’s and Egan’s claims are predicated on a legal duty that is independent of ERISA....Consequently, portions of their claims arise solely under ERISA or ERISA plans and not from any independent legal duty. As for the remaining claims, where removal jurisdiction exists over a completely preempted claim, the district court has jurisdiction over any claims joined with the preempted claim....Therefore, the district court may exercise jurisdiction over Rutt’s and Egan’s nonpreempted state law claims, including those claims for payment in connection with non-ERISA patients.

***

Although this Court has not considered the issue, other courts have concluded that a trade group may obtain statutory standing under ERISA through associational standing....A trade association has standing to sue on behalf of its members when three requirements are met: (a) its members would otherwise have standing to sue in their own right; (b) the interests it seeks to protect are germane to the organization’s purpose; and (c) neither the claim asserted nor the relief requested requires the participation of individual members in the lawsuit. Hunt v. Wash. State Apple Adver. Comm’n, 432 U.S. 333, 343, 97 S. Ct. 2434, 2441 (1977). Even if CSDA met the first two requirements for associational standing, it cannot meet the last one. Generally, an association seeking damages on behalf of its members cannot claim associational standing. See United Food & Commercial Workers Union Local 751 v. Brown Group, Inc., 517 U.S. 544, 554, 116 S. Ct. 1529, 1535 (1996). Damage claims are incompatible with associational standing because such claims usually require “individualized proof.” Warth v. Seldin, 422 U.S. 490, 515-16, 95 S. Ct. 2197, 2214 (1975). Although CSDA seeks both declaratory and injunctive relief, which are normally appropriate relief for associational standing, it also seeks compensatory and punitive damages on behalf of its members, which will require individualized proof of harm. Thus, CSDA could not establish all the requirements for associational standing. Consequently, CSDA’s claim is not completely preempted because it lacks standing to sue under ERISA.

Finally, the court reversed an order of the district court that refused to set aside a judgment. The district court entered a judgment after the plaintiff did not respond to a motion to dismiss.  Because the district court did not apply the test outlined in Pioneer Inv. Servs. Co. v. Brunswick Assocs. Ltd. P’ship, 507 U.S. 380, 395, 113 S. Ct. 1489, 1495 (1993), the judgment was reversed.

Eleventh Circuit Affirms Summary Judgment Against Insured In ERISA Benefits Case

In an unpublished decision, the Eleventh Circuit affirmed the district court in Stuart S. Johnson v. UNUM Provident, et al (09-13687).  Like the published opinion from the Eleventh Circuit released on the same day and discussed HERE, this decision relates to ERISA.  The facts were described as follows:

Stuart S. Johnson participated in a group disability policy issued by Unum Life Insurance Company of America.1 In 1999, Johnson applied to Unum for long-term disability benefits. Unum denied the application. Johnson asked Unum to review its decision to deny benefits three separate times. But, Unum upheld the denial each time, and in a letter dated March 22, 2001, Unum informed Johnson of its decision after the third and final review of the claim....Johnson filed suit against Unum in the United States District Court for the Northern District of Alabama on October 22, 2008, asserting five state-law claims.

Unum moved for summary judgment, which the court granted. The court held that ERISA preempted Johnson’s claims for breach of contract, equitable estoppel, and restitution.  As to the claim for breach of the covenant of good faith and fair dealing and the claim for willful and/or wanton misconduct, the court held that they were not preempted by ERISA, but they were nonetheless barred by the Alabama statute of limitations.  The court also held that Johnson’s ERISA claims were barred by the statute of limitations.

The Eleventh Circuit first determined whether the claims are preempted by ERISA. "Complete or 'super preemption' exists where a plaintiff seeks relief that is available under 29 U.S.C. § 1132(a), the civil enforcement provisions of ERISA."  Citing to Butero v. Royal Mccabees Life Ins. Co., 174 F.3d 1207, 1212 (11th Cir. 1999), the court applied a four part test.  Notably, in a published opinion released on the same day, see Connecticut State Dental v. Anthem Health Plans (08-15268), the Eleventh Circuit held that the Butero test was modified by the United States Supreme Court in Aetna Health Inc. v. Davila, 542 U.S. 200, 210, 124 S. Ct. 2488, 2496 (2004). Connecticut State Dental was discussed HERE.  In the published opinion, the court stated "While similar to the Butero test, Davila refines Butero by inquiring about the existence of a separate legal duty, which is not a consideration under Butero."

The court then stated:

We agree with the district court’s well-reasoned analysis concluding that Johnson’s claims for breach of contract, equitable estoppel, and restitution were subject to super preemption.  ERISA may or may not also preempt Johnson’s remaining state-law claims. In any event, as discussed below, these claims are barred by Alabama’s statute of limitations even if they are not preempted by ERISA. So, we do not consider whether the court erred in concluding that ERISA did not preempt these claims.

***

Finally, we address whether Johnson’s ERISA claims are barred by the statute of limitations. ERISA does not provide its own statute of limitations. Courts either borrow a closely analogous state limitations period, or they apply a contractually agreed upon period, provided it is reasonable.  Johnson’s cause of action accrued, at the latest, when Unum denied his claim for benefits. This occurred no later than March 22, 2001, after the third and final review of Johnson’s claim. The three-year limitations period expired on March, 22, 2004, more than four years before Johnson filed suit....we see no reason to conclude that the district court’s conclusion was clear error. Therefore, we affirm the dismissal of Johnson’s preempted state-law claims and Johnson’s ERISA claim as time-barred.

Debtor's Keogh Plan Exempt In Bankruptcy Under § 222.21(2)(a)(1), Florida Statutes

In In re Baker: Baker v. Tardif (09-13144-HH), the Eleventh Circuit released a published decision and reversed the decision of the Bankruptcy Court and the District Court. The Eleventh Circuit held that the debtor's Keogh plan was exempt under Florida law. Fla. Stat. § 222.21(2)(a)(1).

The bankruptcy court concluded that Baker could not claim the exemption under section 222.21(2)(a)(1) because she was the “sole shareholder and sole ‘participant’ in the Keogh plan.”  The Opinion notes:

After a debtor files for bankruptcy, she is entitled to retain certain assets as exempt from the bankruptcy estate. Although the bankruptcy code provides exemptions, a state may opt out of those exemptions and provide alternative exemptions. 11 U.S.C. § 522(b).

***

Florida law shields from the claims of creditors some assets deposited in retirement and profit-sharing plans. Section 222.21 exempts from the bankruptcy estate money, assets, and any interest in a plan in which the debtor is an owner, participant, or beneficiary and that has been preapproved by the Internal Revenue Service as exempt from taxation under section 401(a) of the Internal Revenue Code.

***

The district court ruled that Baker’s Keogh plan had to be maintained under the Employee Retirement Income Security Act for Baker to claim an exemption under section 222.21(2)(a)(1), but we disagree.

***

In 2005, the Florida Legislature amended section 222.21 to provide that an exempt plan does not have to comply with the Employee Retirement Income Security Act....We reverse the judgment that Baker’s Keogh plan had to comply with the Employee Retirement Income Security Act to qualify for an exemption under section 222.21(2)(a)(1). Section 222.21(2)(a)(1) requires that a profit-sharing plan qualify under section 401(a) of the Internal Revenue Code, not that the plan comply with the Employee Retirement Income Security Act.

The briefs can be found at the following links:

Initial Brief;

Amicus Brief of Nixon Peabody in support of Appellee;

Reply to Nixon Peabody Amicus Brief;

Amicus Brief of Real Property Probate & Trust Section of The Florida Bar In Support Of Appellants.

Massachusetts Supreme Judicial Courts Finds Equitable Restitution Claim Preempted By ERISA

In Hitachi High Technologies America, Inc. vs. Bowler (SJC-10386), the Massachusetts Supreme Judicial Court held that an ERISA plan fiduciaries state law action to recover money mistakenly paid to a plan fiduciary was preempted by the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. §§ 1001 et seq. (2006).  Ultimately, the court held that the plan either had a remedy in federal court or had no remedy at all.  Regardless, there was no viable cause of action in state court.

The court stated:

It appears likely that Hitachi has a remedy under 29 U.S.C. § 1132(a)(3)--a question for a Federal court to decide. See 29 U.S.C. § 1132(e). Even if Hitachi cannot bring an action for equitable restitution under 29 U.S.C. § 1132(a)(3)(B), Hitachi's action nevertheless falls within the "scope" of ERISA's civil enforcement provision and is therefore preempted. Danca v. Private Health Care Sys., Inc., 185 F.3d 1, 5 n. 4 (1st Cir.1999) ("The fact that ERISA does not provide the remedy plaintiffs seek is not relevant; all that matters is that the claim be within the scope" of ERISA's enforcement provision [emphases in original] ). See Aetna Health Inc. v. Davila, 542 U.S. 200, 209 (2004) ("any state-law cause of action that duplicates, supplements, or supplants the ERISA civil enforcement remedy conflicts with the clear congressional intent to make the ERISA remedy exclusive and is therefore pre-empted").

3. Conclusion. We conclude that allowing Hitachi to go forward with its unjust enrichment action would present the threat of inconsistent regulation relating to the administration of ERISA plans and would constitute an "alternative enforcement mechanism." Therefore, Hitachi's action for unjust enrichment "relates to" an ERISA plan, 29 U.S.C. § 1144(a), and the judge did not err in dismissing this action based on ERISA preemption.

Ninth Circuit Issues Published Opinion On ERISA Preemption Of State Laws Preventing Discretionary Clauses In Insurance Policies

In Standard Insurance Co. v. Morrison (08-35246), the Ninth Circuit affirmed the district court's decision that the decision by the Montana Commissioner of Insurance to forbid so called "discretionary clauses" in insurance contracts was not preempted by the Employee Retirement Income Security Act of 1974.  The court stated:

Under the Employee Retirement Income Security Act of 1974 (“ERISA”), insureds who believe they have been wrongfully denied benefits may sue in federal court. The court determines the standard of review by checking for the presence of a discretionary clause. Such a clause might read: “Insurer has full discretion and authority to determine the benefits and amounts payable [as well as] to construe and interpret all terms and provisions of the plan.” If an insurance contract has a discretionary clause, the decisions of the insurance company are reviewed under an abuse of discretion standard. Absent a discretionary clause, review is de novo. Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 111 (1989).

The Montana Commissioner of Insurance made it his practice to refuse to approve any form submitted by an insurance company that contained such a discretionary clause.  When he rejected a form submitted by Standard Insurance, the carrier filed suit claiming his decision was preempted by ERISA.

With certain exceptions, ERISA preempts “any and all State laws insofar as they may now or hereafter relate to any [covered] employee benefit plan.” 29 U.S.C. § 1144(a). Relevant here, the so-called savings clause saves from preemption “any law of any State which regulates insurance, banking, or securities.” Id. § 1144(b)(2)(A). Thus, while ERISA has broad preemptive force, its “saving clause then reclaims a substantial amount of ground.” Rush Prudential HMO, Inc. v. Moran, 536 U.S. 355, 364 (2002).

The court then provided the test to be applied:

Here, no one disputes that Commissioner Morrison’s practice “relate[s] to any [covered] employee benefit plan.” 29 U.S.C. § 1144(a). It is thus preempted unless preserved by the savings clause. To fall under the savings clause, a regulation must satisfy a two-part test laid out in Kentucky Ass’n of Health Plans, Inc. v. Miller, 538 U.S. 329, 342 (2003). “First, the state law must be specifically directed toward entities engaged in insurance.” Id. Also, it “must substantially affect the risk pooling arrangement between the insurer and the insured.” Id. We now turn to those two prongs.

The court held:

Accordingly, the Commissioner’s practice is “specifically directed toward entities engaged in insurance,” Kentucky Ass’n, 538 U.S. at 342, and it “substantially affect[s] the risk pooling arrangement between the insurer and the insured,” more so than other laws which have been upheld by theSupreme Court. The practice of disapproving discretionary clauses is thus saved from preemption under 29 U.S.C. § 1144(a) by the savings clause in section 1144(b).

The court then held that the Commissioner's practice is not preempted by ERISA's "exclusive remedial scheme for insureds who have been denied benefits. 29 U.S.C. § 1132(a)."

Finally, the court rejected Standard Insurance's argument "that a state’s forbidding discretionary clauses is inconsistent with the purpose and policy of the ERISA remedial system, which emphasizes a balance between protecting employees’ right to benefits and incentivizing employers to offer benefit plans." 

It relies on the Supreme Court’s decision in Metropolitan Life Insurance Co. v. Glenn, 128 S. Ct. 2343 (2008). There, the Court noted that a conflict of interest exists when the entity determining eligibility for benefits also bears the financial burden of paying for them. Id. at 2348. However, the Court rejected a call to repudiate Firestone Tire and instead retained the abuse-ofdiscretion standard (albeit tempered by consideration of the conflict), saying that it “would [not] overturn Firestone by adopting a rule that in practice could bring about near universal review by judges de novo—i.e., without deference—of the lion’s share of ERISA plan claims denials.” Id. at 2350. “Had Congress intended such system,” the Court continued, “it would not have left to the courts the development of review standards but would have said more on the subject.”

***

Glenn involved an exercise of the Court’s power to make federal common law, as evidenced by its frequent reference to trust law and the absence of any applicable state insurance regulation. The Court’s refusal to create a system of universal de novo review does not necessarily mean that states are categorically forbidden from issuing insurance regulations with such effect. After all, the states have retained power to institute quite a number of rules affecting ERISA plans pursuant to their savings clause powers. See, e.g., Kentucky Ass’n, 538 U.S. at 329; Rush Prudential, 536 U.S. at 355; UNUM Life, 526 U.S. at 358; Metro. Life, 471 U.S. at 724.

***

We decline to create an additional exception from the savings clause here. Like the regulatory scheme in Rush Prudential, the Commissioner’s practice “provides no new cause of action under state law and authorizes no new form of ultimate relief.” Id. at 379. The Rush Prudential court emphasized that the scheme in that case “does not enlarge the claim beyond the benefits available” and does not grant relief other than “what ERISA authorizes in a suit for benefits under § 1132(a).” Id. Neither does the Commissioner’s practice.

I am sure a petition for rehearing en banc is forthcoming. 

The first point I noticed, which may be addressed if I looked further into it, is as follows: Page five of the opinion states "the so-called savings clause saves from preemption 'any law of any State which regulates insurance, banking, or securities'.” The issue here was not a law of the state but a practice of the insurance commissioner. The court stated "We will call this his 'practice,' as there is no specific Montana law forbidding discretionary clauses."  The savings clause relates to any law of any state but the court indicates this is not a law.

Eleventh Circuit Affirms Summary Judgment To Plan In ERISA Long Term Disability Case

In Trina Gipson v. Administrative Committee of Delta Airlines, Inc., et al (09-11748), the Eleventh Circuit affirmed the district court's grant of summary judgment to Delta's administrative plan in an ERISA long term disability dispute.

The court outlined the facts as follows:

Gipson worked for Delta as a reservation agent until April 1995, when she requested and received short-term disability benefits due to fibromyalgia, depression, and headaches. In October 1995, she began to receive long-term disability benefits.  In 2001, the Plan transferred review of Gipson’s case to Aetna, which initiated a reassessment and traced Gipson’s medical history. Aetna continued to gather medical information over the next few years until it denied long-term disability benefits in 2004.

***

The district court granted the Committee’s summary judgment motion. The district court first determined that it would not consider materials not presented to the Committee. The court then concluded that the Committee’s decision was not “wrong,” as Gipson had not shown she was entitled to benefits. The court reviewed the medical records and agreed that Singh’s reports were conclusory and lacked any objective findings to support the conclusion that Gipson was unable to work. The court also concluded that the fact that Gipson received Social Security benefits was not dispositive because the rules applicable to such determinations did not apply to ERISA claims.

In the opinion, the court provided an extensive review of the factual backgroud in the opinion which is not copied here.

The first issue the court addressed was the standard of review:

Where, as here, an ERISA plan endows the plan administrator with discretion to determine eligibility for plan benefits, we review the administrator’s decision under a deferential standard. Firestone Tire and Rubber Co. v. Bruch, 489 U.S. 101, 111, 109 S.Ct. 948, 103 L.Ed.2d 80 (1989). We will reverse the plan administrator’s decision only if it was arbitrary and capricious.

The court then affirmed the district court's refusal to consider evidence not presented to the plan administrator:

We agree with the district court that the additional evidence was not properly before it. Our law is clear; even under the first step of the analysis, where the court determines whether the administrator was wrong under a “de novo” standard, “[w]e are limited to the record that was before [the administrator] when it made its decision.” Glazer v. Reliance Standard Life Ins., 524 F.3d 1241, 1247 (11th Cir. 2008). Thus, the district court properly rejected the additional evidence Gipson submitted.

Objective Medical Evidence:

The Committee, faced with conflicting medical evidence, determined that Gipson was able to engage in some level of employment. Gipson has not shown that this determination was arbitrary and capricious. “Under the arbitrary and capricious standard of review, the plan administrator’s decision to deny benefits must be upheld so long as there is a ‘reasonable basis’ for the decision.” Oliver v. Coca Cola Co., 497 F.3d 1181, vacated in part on petition for reh’g, 506 F.3d 1316 (11th Cir. 2007). Here, Selvey and Friedman gave thorough and detailed reasons for their medical opinions. In contrast, Singh’s opinion was conclusory, with no rationale. In light of these conflicting opinions, the Committee’s decision was not arbitrary and capricious.

As to the weight to be given to the treating physician's opinion:

A plan administrator has no obligation to give a treating physician’s opinion more weight. See Black & Decker Disability Plan v. Nord, 538 U.S. 822, 834 (2003). Here, the treating physician’s opinion was conclusory and failed to provide any basis for the decision that Gipson was unable to work. In contrast, the opinions of Selvey and Friedman contradicted Singh’s opinion and explained why Gipson was capable of some level of work. Moreover, the other physicians who treated Gipson opined that she required other medication and psychotherapy, all of which Gipson refused. This non-compliance further supports the Committee’s conclusion that benefits were not warranted.

Finally, with regard to a prior payment for the long term disability:

First, Levinson does not stand for the proposition that one payment of benefits forever binds the company. In any event, we find the facts of Levinson distinguishable for the simple reason that, unlike Levinson, the medical evidence in this case was not one-sided; there was ample evidence from which the Committee could conclude Gipson was not disabled. Under the terms of the Plan, Gipson was required to show an ongoing disability. We agree with the Committee and the district court that Gipson failed to meet this burden.

FDA Preemption Claim Rejected By Fourth District - Defensive Preemption Not Complete Preemption

In Cordis Corporation v. O’Shea (4D09-1597), the Fourth District denied the petitioner's writ of prohibition without prejudice for the petitioner's to raise the challenge on final review.  The court stated:

Part of petitioners’ defense is that federal law preempts state causes of action. The Cypher stent is considered a Class III medical device regulated by the Food and Drug Administration (FDA)...The FDA may deny the application, request additional information from the manufacturer, or grant approval. The manufacturer must comply with all design, manufacturing and labeling specifications set forth in a PMA approval order. 21 C.F.R. § 814.80. Petitioners advise that the FDA continues its oversight of the safety and effectiveness of PMA-approved devices after approval.

 ***

Petitioners’ argument is that the FDA’s extensive oversight of the Cypher brand stent’s safety and effectiveness leads to federal preemption of a n y state claim that challenges the FDA’s determination that the stent is safe. 

In a thoughtful series of orders, the circuit court dismissed some claims, allowed others to proceed, and considered the application of Riegel v. Medtronic, Inc., 552 U.S. , 128 S. Ct. 999 (2008), where the Supreme Court wrote:

State requirements are pre-empted under the MDA only to the extent that they are “different from, or in addition to” the requirements imposed by federal law. Section 360k(a)(1).  Thus, Section 360K does not prevent a State from providing a damages remedy for claims premised on a violation of FDA regulations; the state duties in such a case “parallel,” rather than add to, federal requirements.

Id. at 1011 (citations omitted).

The court then rejected the argument that American Maritime Officers Union v. Merriken, 981 So. 2d 544 (Fla. 4th DCA 2008) controlled the preemption analysis.  The American Maritime Officers Union decision was previously discussed here.  Specifically, the court stated:

We reject petitioners’ assertion that this case is controlled by American Maritime Officers Union v. Merriken, 981 So. 2d 544 (Fla. 4th DCA 2008). In American Maritime, we held that a petition for prohibition would lie where a complaint against a benefits plan alleging whistleblower claims was completely preempted by federal ERISA law.  However, that holding was based up on ERISA’s grant of exclusive  jurisdiction to federal district courts for violations under its laws. See 29 U.S.C. § 1132(e). No similar statute grants exclusive jurisdiction over the subject matter of this case.

Finally, the court agreed that this was defensive preemption and not complete preemption (as was found in American Maritime Officers Union).  "Further, the issues presented are more properly characterized as a “choice of law” issue rather than 'choice of forum' preemption, which would provide exclusive jurisdiction in the federal courts...We agree with the analysis of Gonzales v. Surgidev Corp., 899 P. 2d 576, 582 (N.M. 1995):

In considering whether federal preemption affects subject matter jurisdiction, the issue is not whether Congress intended to replace state law with a federal regulatory scheme but 'whether jurisdiction provided by state law is itself pre-empted by federal law vesting exclusive jurisdiction over that controversy in another body.'

Eleventh Circuit Dismisses ERISA Appeal For Lack Of Standing Under § 1132

In Dunn v. Harris Corp. (08-13847), the Eleventh Circuit affirmed the district court's dismissal of the plaintiff's ERISA claim.

“Section 1132 is essentially a standing provision [that] sets forth those parties who may bring civil actions under ERISA and specifies the types of actions each of those parties may pursue.” Gulf Life Ins. Co. v. Arnold, 809 F.2d 1520, 1524 (11th Cir. 1987). The only parties authorized to bring a lawsuit under § 1132 are participants, beneficiaries, fiduciaries, or the Secretary of Labor. ERISA defines a beneficiary as “a person designated by a participant, or by the terms of an employee benefit plan, who is or may become entitled to a benefit thereunder.” 29 U.S.C. § 1002(8). “Standing represents a jurisdictional requirement which remains open to review at all stages of the litigation.” Nat’l Org. For Women, Inc. v. Scheidler, 114 S. Ct. 798, 802 (1994).

 

The only basis for Dunn to have standing to sue Harris and Fidelity in this case is if she is deemed a beneficiary. Dr. Cox has already been determined to be the proper beneficiary of Buddy’s 401(k) plan, and that determination has been affirmed by this Court. In light of that judgment, Dunn cannot become entitled to the 401(k) plan benefits, so she is not a beneficiary or potential beneficiary who has standing to bring a claim under § 1132. See Arnold, 809 F.2d at 1524. Dunn does not have standing, so we dismiss this appeal.

Eleventh Circuit on COBRA and ERISA

In Harris v. United Automobile Insurance Group, Inc. (08-16097), the appellant/plaintiff was a former attorney for United who enrolled in COBRA following the termination of employment. Payment of his COBRA preemium was considered received on the date it was postmarked. The appellant mailed his monthly premium on the day it was due, however, it was not postmarked until the following day. United cancelled the COBRA policy based upon the failure to make the payment. The district court held that United properly cancelled the policy for failure to pay the premium.

The Eleventh Circuit stated:

On appeal, Harris asserts only that the regulations at 26 C.F.R. § 54.4980B-8 give rise to a claim for benefits under 26 U.S.C. § 1132(a)(1)(B) and that under these regulations he should have been allowed the same period of time to pay his COBRA premium as UAIG is given to fund the plan.

***

We conclude that this regulation does not entitle Harris to additional time beyond that provided by UAIG’s plan. The parties agree that UAIG was self-funding, meaning that medical claims were paid from the employer’s assets rather than being paid through an insurance policy. In other words, UAIG did not have a relationship such as the one described in the above regulation; it did not have an “arrangement” under the terms of which it was given a certain period of time to pay for the coverage of non-COBRA beneficiaries. The additional time frame provided in the regulation applies only to those plans that are fully-funded, i.e. that involve an agreement with an insurance company to provide benefits.

The court then noted that even though the basis for affirming the district court order's was different than the reasoning used by the district court, the court can affirm "the district court’s judgment on any ground that appears in the record, whether or not that ground was relied upon or even considered by the court below.” The court then declined to award attorneys fees.

ERISA: Interpretations of Metropolitan Life Insurance Co. v. Glenn

Two more Cicuit decisions interpreting Metropolitan Life Insurance Co. v. Glenn, – U.S. –, 128 S. Ct. 2343 (2008):

Marks v. Motorola, Inc. (08-2451): Judge Posner, today, as only he can, writing for the Seventh Circuit. Joined by Chief Judge Easterbrook and Judge Bauer.

Holcomb v. Unum Life Insurance Company of America (08-6183): Judge Tacha, on Tuesday, writing for the Tenth Circuit. Joined by Judge O'Brien and Judge Gorsuch.

The Eleventh Circuit's decision in Ruple v. Hartford Life & Accident Insurance (09-11287) was released on Tuesday and previously discussed here. The Eleventh Circuit's decision was a per curium opinion by Judge's Birch, Hull and Kravitch.

Eleventh Circuit on a Variety of ERISA Issues

In Ruple v. Hartford Life & Accident Insurance (09-11287), the Eleventh Circuit addressed a number of ERISA issues. You can find Roy Harmon's post at the Health Plan Law blog on the case here. The issues discussed follow:

1. Citing to, among other cases, Metro. Life Ins. Co. v. Glenn, – U.S. –, 128 S.Ct. 2343 (2008), the Eleventh Circuit addressed the test to be used to review an administrators decision:

This court uses a multi-step analysis to guide these reviews of Administrator decisions and the various standards of review. HCA Health Services of Georgia, Inc. v. Employers Health Ins. Co., 240 F.3d 982, 993-95 (11th Cir. 2001). The analysis involves six steps: (1) Apply the de novo standard to determine whether the claim administrator’s benefits-denial decision is “wrong” (i.e., the court disagrees with the administrator’s decision); if it is not, then end the inquiry and affirm the decision.

In a footnote, the court stated: "Because we decide this case at the first step of the analysis, see infra, we need not determine the level of discretion held by Hartford."

2. The Court applies the terms of the Policy

Additionally, when the court makes its own determination of whether the administrator was “wrong” to deny benefits under the first step of the Williams analysis, the court applies the terms of the policy.

3. Review is Limited to Administrative Record

Our law is clear, however, that even under the first step of the BellSouth analysis, where the court determines whether the administrator was wrong under a “de novo” standard, “[w]e are limited to the record that was before [the administrator] when it made its decision.” Glazer v. Reliance Standard Life Ins., 524 F.3d 1241, 1247 (11th Cir. 2008); Jett, 890 F.2d at 1139. Accordingly, the Magistrate Judge appropriately refused to allow Ruple to submit new evidence not contained in the administrative record before Hartford.

4. The Social Security Admistration's Determination Does Not Control ERISA Determination

The Social Security Administration’s determination that an individual is or is not disabled under its statutes and regulations does not dictate whether that same individual is disabled under the terms of an ERISA policy. Whatley v. CNA Ins. Cos., 189 F.3d 1310, 1314 n.8 (11th Cir. 1999).

5. Burden of Proof is on Claimant

Although Ruple acknowledges that the burden ordinarily rests with the person claiming benefits under an ERISA plan, see Horton v. Reliance Standard Life Ins. Co., 141 F.3d 1038, 1040 (11th Cir. 1998), he contends that because Hartford once gave benefits the burden shifts to Hartford to prove that he is no longer entitled to benefits. Ruple relies on Levinson v. Reliance Standard Life Ins. Co., 245 F.3d 1321 (11th Cir. 2001) to support his argument that the burden shifts to the administrator to disprove disability once the administrator has begun paying benefits. We disagree with Ruple’s reading of Levinson.

Supreme Court Grants Certiorari in Seven Cases

The Supreme Court granted certiorari in seven cases today. The briefs for a couple of them, and a short description is pasted from the SCOTUS Blog below:

Docket: 08-803, 08-810, 08-826
Title: Alfieri v. Conkright; Conkright v. Frommert; Pietrowski v. Conkright
Issue: Whether the statutory requirements for releases of claims under the Older Workers Benefit Protection Act are applicable to ERISA claims; whether Firestone deference applies to a plan administrator’s interpretation of benefits when issued outside of the administrative claims process; and whether a totality-of-the-circumstances test should be used to determine if an employee has “knowingly and voluntarily” waived pension benefits by signing a boilerplate release.

Opinion Below (2nd Circuit)
Petition for certiorari (08-803)
Petition for certiorari (08-810)
Petition for certiorari (08-826)
Brief in opposition(08-803, 08-826)
Respondent’s supplemental brief (08-803, 08-826)
Brief in opposition(08-810)
Brief in opposition of 62 respondents and 7 cross-respondents (08-810)
Petitioner’s reply (08-810)
Petitioner’s supplemental brief (08-810)
Brief amicus curiae of Business Roundtable (in support of petitioners in 08-810)
Brief amicus curiae of the United States (recommending that certiorari be denied)

Docket: 08-661
Title: American Needle Inc. v. NFL, et al
Issue: Whether NFLP, the NFL, and the teams functioned as a “single entity” when granting the company an exclusive headwear license and therefore could not violate Section 1 of the Sherman Act, 15 U.S.C. 1, which requires proof of collective action involving “separate entities.”
Petition for certiorari
Brief of respondents NFL
Petitioner’s supplemental brief
Brief amicus curiae of NHL in support of respondents
Brief amicus curiae of NBA in support of respondents
Brief amicus curiae of the United States (recommending that certiorari be denied)

Docket: 08-1214
Title: Granite Rock Company v. nternational Brotherhood of Teamsters, et al.
Issue: Whether a federal court has jurisdiction to determine collective bargaining agreement formation and whether a §301(a) action is available against a union that is not a direct signatory to the collective bargaining agreement.
Petition for certiorari
Brief in opposition of respondents International Brotherhood of Teamsters
Brief in opposition of respondent Teamsters Local 287
Petitioner’s reply
Brief amicus curiae of Center on National Labor Policy, Inc.
Brief amicus curiae of Associated General Contractors of America, Inc.
Brief amicus curiae of National Association of Manufacturers

Claim for Breach of Fiduciary Duty Cannot Be Brought After Claim for Breach of ERISA Benefits Fails

In its second opinion on the same claim, the Eleventh Circuit held the plaintiff could not assert a breach of fiduciary duty claim after she had previously failed on her claim for breach of ERISA benefits. The first opinion in Burroughs v. BellSouth Telecommunications, 248 Fed. App. 64 (11th Cir. 2007) can be found here and the second opinion can in Burroughs v. Broadspire can be found here. In the Burroughs v. Broadspire opinion released on April 15, 2009, the Court held:

After reviewing the record and reading the parties briefs, we see no reversible error. Burroughs’ claims in the instant case are virtually identical to her criticisms of Broadspire in Burroughs I. Burroughs cannot state a claim for breach of fiduciary duties where she was able to assert a claim for an appropriate remedy for the denial of benefits under ERISA § 502(a)(1)(B). See Varity Corp. v. Howe, 516 U.S. 489 (1996). We have held multiple times, under these circumstances, a breach of fiduciary duty claim cannot be asserted. See Ogden v. Blue Bell Creameries, U.S.A., Inc., 348 F.3d 1284 (11th Cir. 2003); Katz v. Comprehensive Plan of Group Ins., 197 F.3d 1084 (11th Cir. 1999).

Alternatively, under both claim and issue preclusion, our earlier decision in Burroughs I holding that Broadspire was neither arbitrary nor capricious precludes Burroughs from continuing to assert claims against Broadspire based on the same 2004 benefit decision. Accordingly, for the aforementioned reasons, we affirm the judgment of dismissal.