Justia U.S. 6th Circuit Court of Appeals Opinion Summaries

In 1992 a brokerage firm established a nonqualified defined benefit plan for a select group of highly compensated executives. The plan contains provisions that, if triggered, result in discontinuance of payments and forfeiture of benefits accrued, regardless of how long a participant has been enrolled. Plaintiffs are executives who left the firm and went to work for a rival company, triggering provisions that forfeited benefits. After exhausting their claims before the plan's administrative committee, they filed suit under the Employee Retirement Income Security Act, 29 U.S.C. 1053(a)(2), claiming improper denial of benefits. The district court granted summary judgment to plaintiffs. The Sixth Circuit reversed. The existence of an ERISA plan is not a jurisdictional issue and defendants waived their argument that the plan was not an ERISA plan by neglecting to raise it until after summary judgment, but the district court should have remanded the issue of whether the plan is qualifies as a top-hat, deferred-compensation plan under section 201(2) of ERISA: a plan which is unfunded and is maintained by an employer primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees.

Patient, insured by defendant, diagnosed with end-stage renal disease, and received dialysis at plaintiff's center. Three months after diagnosis, she became entitled to Medicare benefits (42 U.S.C. 426-1). Her plan provided that coverage ceased at that time, because of her entitlement to Medicare, but the insurer continued to pay for two months. Under the 1980 Medicare Secondary Payer Act, a group health plan may not take into account that an individual is entitled to Medicare benefits due to end-stage renal disease during the first 30 months (42 U.S.C. 1395y(b)(1)(C)(i)), but the insurer terminated coverage. Plaintiff continued to treat and bill. The insurer declared that termination was retroactive and attempted to offset "overpayment" against amounts due on other patients' accounts. The outstanding balance after patient's death was $210,000. Medicare paid less than would have been received from the insurer. The center brought an ERISA claim, 29 U.S.C. 1132(a)(1)(B), and a claim for double damages under the 1980 Act. The district court granted plaintiff summary judgment on its ERISA claim but dismissed the other. The Sixth Circuit affirmed on the ERISA claim and reversed dismissal. A healthcare provider need not previously "demonstrate" a private insurer's responsibility to pay before bringing a lawsuit under the 1980 Act's private cause of action.

The district court certified a class action and a proposed class in an action under the Employee Retirement Income Security Act, 29 U.S.C. 1001. The suit claimed that Blue Cross breached its fiduciary duty by imposing and failing to disclose an other-than-group subsidy and that the OTG subsidy violated Mich. Comp. Laws 550.1211(2). The state insurance commissioner took the position that state law allows the assessment and that revenue it generates funds Medigap coverage. The Sixth Circuit reversed, holding that the class action is not the superior method of adjudication (Federal Rule of Civil Procedure 23(b)(3)) and prosecuting separate actions does not present the risk of inconsistent adjudications (FRCP 23(b)(1)(A)). ERISA fiduciary status is a crucial threshold factual issue specific to every class member, requiring the court to make individualized determinations. Resolution of the legality of the subsidy before that determination would also mitigate the state's concerns about stopping collection of the fee. Potential awards at stake would not preclude individual class members from seeking relief and there was no evidence that individual litigation would create a risk of inconsistent adjudications that would establish incompatible standards of conduct for the defendant.

The employee failed to provide information requested to supplement his request for leave under the Family and Medical Leave Act (FMLA), exhausted his vacation time, was discharged for insubordination, and applied for benefits through a plan covered by the Employee Retirement Income Security Act, 29 U.S.C. 1001. The administrator denied the claim because the plan specifically excludes discharge for insubordination. A review committee affirmed. The district court entered summary judgment upholding the denial. The Sixth Circuit affirmed, holding that the administrator was not required to go beyond the language of the plan and determine whether the termination violated FMLA. The administrator did not have the ability to resolve the FMLA claim between the employee and employer and it is irrelevant that the review committee made some effort to consider the FMLA issue.