RECENT DEVELOPMENTS IN EMPLOYEE BENEFITS LAW

• Published in: Tort trial & insurance practice law journal 2019-04, Vol.54 (2), p.435-446
• Main Authors: Costin, Emily Seymour, Hootkins, Emily C.
• Format: Article
• Language: English
• Subjects: Causality; District courts; Employee benefits; ERISA; Federal court decisions; Fiduciary responsibility; Pension plans; State court decisions; Trials
• ISSN: 1543-3234; 1943-118X

Plaintiff is the widow of a participant in two multiemployer benefit plans: a pension plan (which provided pension and survivor benefits) and a welfare plan (which provided health benefits).9 Following the participant's death, plaintiff became entitled to survivor benefits.10 However, the amount of such benefits was much lower than she had expected, leading to a pair of lawsuits based on allegedly misleading representations made prior to the participant's death.11 The United States District Court for the Southern District of New York granted summary judgment in favor of defendants on all claims.12 On appeal, the Second Circuit first considered plaintiff's claim regarding the pension plan.13 The court found that "[t]he plain terms of the Pension Plan establish that [plaintiff] was not entitled to the augmented survivor benefit that she seeks, notwithstanding any erroneous advice that she may have received. Plaintiff is an out-of-network healthcare provider who performed shoulder surgery on a patient covered by an ERISA-governed health plan insured by defendant.24 Following defendant's limited payment for the surgery, plaintiff filed this lawsuit as an assignee of the patient to seek additional payment for the services.25 Defendant argued that plaintiff lacked standing to sue based on an anti-assignment clause contained in the plan, and the United States District Court for the District of New Jersey agreed and dismissed the complaint.26 On appeal, plaintiff argued that anti-assignment clauses in ERISA plans are unenforceable against healthcare providers.27 In considering this argument, the Third Circuit first looked to ERISA's text and found a "statutory gap yet to be filled" and noted that ERISA is "inconclusive" on the enforceability of anti-assignment clauses such as the one at issue.28 The Third Circuit next considered the parties' policy arguments, but found they did "little to tip the scales" because "neither party cites to authoritative empirical data. [...]the en banc panel of the Fifth Circuit "change[d] course" and adopted the majority approach that Firestone's default de novo standard applies when the denial is based on a factual determination.48 Among other things, it was supported by ERISA's "strong interest in uniformity. [...]the district court's judgment was reversed, and the new fiduciary rule was vacated.