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

The economic health of Cliffs, a publicly-traded iron-ore and coal-mining company, depends on Chinese economic growth. In 2011, Chinese construction projects drove iron-ore prices to all-time highs. Cliffs financed the purchase of Bloom Lake Mine in Quebec. Projecting that the mine would increase cash-flow, Cliffs upped its stock dividend to double the S&P 500 average. In 2012, a global demand slump halved the price of iron ore. The mine became a major liability. In 2013, Cliffs stock performed worse than any other company in the S&P 500. Cliffs lost 95% of its value between 2011 and 2015. Plaintiffs are Cliffs employees who participated in the company’s 401(k) defined-contribution plan, which allowed participants to invest in 28 mutual funds, including an array of target-date, stock, and bond funds, or an Employee Stock Ownership Plan (ESOP) that invested solely in Cliffs stock. If the employee failed to choose an investment option, the fiduciary directed contributions into a money-market fund. The Sixth Circuit affirmed dismissal of plaintiffs’ class action under the Employee Retirement Income Security Act, 29 U.S.C. 1104(a)(1), which claimed that the plan’s fiduciaries imprudently retained Cliffs stock as an investment option. The court stated that any change in policy with respect to diversification and ESOPs must come from Congress. View "Saumer v. Cliffs Natural Resources, Inc." on Justia Law

Plaintiffs were Cumberland University employees, participating in its 403(b) defined contribution pension plan. In 2009, the University adopted a five percent matching contribution. In 2014, the University amended the Plan to replace the five percent match: the University would determine the amount of its matching contribution on a yearly basis, retroactive to 2013. The University announced that its matching contribution for the 2013–14 and 2014-2015 years would be zero percent. The Plan stated: An Employer cannot amend the Plan to take away or reduce protected benefits under the Plan and that “all Plan Participants shall be entitled to . . . [o]btain, upon request to the Employer, copies of documents governing the operations of the Plan.” As of January 2017, the University had not produced a summary plan description after the 2009 Summary Plan Description, despite repeated requests, nor did it provide formal written notice of the amendment within a reasonable period. Plaintiffs filed a class action complaint, alleging violations of the Employee Retirement Income Security Act, 29 U.S.C. 1001, by wrongful denial of benefits, cutbacks, failure to provide notice, and breach of fiduciary duty. The district court dismissed without prejudice for failure to administratively exhaust the claims. The Sixth Circuit reversed, holding, as a matter of first impression, that plan participants need not exhaust administrative remedies before proceeding to federal court when they assert statutory violations under ERISA. View "Hitchcock v. Cumberland University 403(b) DC Plan" on Justia Law

Plaintiff and Henry married in 1987 and divorced in 1993. The Divorce Judgment granted Plaintiff one-half of the pension benefits Henry had accrued during the marriage, with full rights of survivorship. Henry was forbidden from choosing a payment option that would deprive Plaintiff of these benefits. Henry worked for Chrysler from 1965 to 1992, and began receiving retirement benefits in 1994, under a “Lifetime Annuity Without Surviving Spouse” option, in violation of the Judgment. Plaintiff’s attorney submitted the Judgment to the Plan administrator, who stated that the Judgment lacked information required by 29 U.S.C. 1056(d)(3)(C) to qualify as a “qualified domestic relations order,” so it could not override ERISA’s anti-alienation provision. Plaintiff did not contact the Plan again until after Henry had died in 2007. The Plan denied her benefits request, noting “the participant does not have a remaining benefit to be assigned.” For six years, Plaintiff unsuccessfully attempted to have the Plan qualify the Judgment. The Plan noted that changing the type of benefit was impermissible under plan the rules. In 2014, plaintiff obtained a nunc pro tunc order, correcting the Judgment. The Plan again denied benefits. Plaintiff filed suit under ERISA. The district court granted Plaintiff summary judgment, reasoning that, to the extent Plaintiff’s claim was based on the 2014, denial of benefits based on the Nunc Pro Tunc Order, it was timely and that the Order relates back to 1993. The Sixth Circuit reversed, finding the claim untimely. View "Patterson v. Chrysler Group, LLC" on Justia Law

As a nurse at the University of Louisville Hospital, Milby was covered by a long-term disability insurance policy. In 2011, Milby sought and received disability benefits for 17 months. During a subsequent eligibility review, the plan engaged MCMC, a third-party reviewer. MCMC opined that the “opinions of [Milby’s treating physicians] are not supported by the available medical documentation” and that she could perform sustained full-time work without restrictions as of 2/22/2013. Neither MCMC nor its agent was licensed to practice medicine in Kentucky. The plan terminated Milby’s benefits effective February 2013. Milby’s suit against her disability insurance provider remains pending. She also filed suit alleging negligence per se against MCMC for practicing medicine in Kentucky without appropriate licenses. MCMC removed the case to federal court, claiming complete preemption under the Employee Retirement Income Security Act (ERISA). The trial court denied Milby’s motion for remand to state court and dismissed. The Sixth Circuit affirmed. The state-law claim fits in the category of claims that are completely preempted by ERISA: it is in essence about the denial of benefits under an ERISA plan and the defendant does not owe an independent duty to the plaintiff because the defendants were not practicing medicine under the specified Kentucky law. View "Milby v. MCMC, LLC" on Justia Law

Fleet Owners Fund is a multi-employer “welfare benefit plan” under the Employee Retirement Security Act (ERISA), 29 U.S.C. 1001, and a “group health plan” under the Patient Protection and Affordable Care Act (ACA), 26 U.S.C. 5000A. Superior Dairy contracted with Fleet for employee medical insurance; the Participation Agreement incorporated by reference a 2002 Agreement. In a purported class action, Superior and its employee alleged that, before entering into the Agreement, it received assurances from Fleet Owners and plan trustees, that the plan would comply in all respects with federal law, including ERISA and the ACA. Plaintiffs claim that, notwithstanding the ACA’s statutory requirement that all group health plans eliminate per-participant and per-beneficiary pecuniary caps for both annual and lifetime benefits, the plan maintains such restrictions and that Superior purchased supplemental health insurance benefits to fully cover its employees. Fleet argued that the plan is exempt from such requirements as a “grandfathered” plan. The district court dismissed the seven-count complaint. The Sixth Circuit affirmed, concluding that plaintiffs lacked standing to bring claims under ERISA and ACA, having failed to allege concrete injury, and did not allege specific false statements. View "Soehnlen v. Fleet Owners Insurance Fund" on Justia Law

Before accepting a transfer to a Bridgestone facility in North Carolina, Deschamps expressed concern about losing pension credit for his 10 years of employment with Bridgestone in Canada. After receiving assurances from Bridgestone’s management team that he would keep his pension credit, Deschamps accepted the position. For several years, Deschamps received written materials confirming that his date of service for pension purposes would be August 1983. He turned down employment with a competitor at a higher salary because of the purportedly higher pension benefits he would receive at Bridgestone. In 2010, Deschamps discovered that Bridgestone had changed his service date to August 1993, the date he began working at the American plant. After failed attempts to appeal this change through Bridgestone’s internal procedures, Deschamps filed suit, alleging equitable estoppel, breach of fiduciary duty, and an anti-cutback violation of ERISA, 29 U.S.C. 1054(g). The Sixth Circuit affirmed summary judgment for Deschamps on all three claims. The text of the plan “is at worst ambiguous, but at best, favors Deschamps’s argument that he was a covered employee in 1983” and, as a result of the change in the interpretation of this provision that excluded foreign employees from being classified as covered employees, Deschamps’s benefits were decreased. View "Deschamps v. Bridgestone Americas, Inc." on Justia Law

Okuno was working as an art director with a clothing company when she developed symptoms including vertigo, extreme headaches, memory loss, and abdominal pain. Though she had previously been diagnosed with fibromyalgia and degenerative disc disease, Okuno contends that these maladies had been “stable and well-controlled” for years and did not prevent her from working. After visits to multiple specialists, numerous tests, and two visits to the emergency room, Okuno was eventually diagnosed with narcolepsy, Crohn’s disease, and Sjogren’s syndrome, an autoimmune disease. After diagnosis, she struggled with negative drug interactions and the side effects associated with her many treatments. Unable to continue working, Okuno went on short-term disability and applied for benefits under her employer’s long-term disability plan, issued and administrated by Reliance. Reliance denied the application on the basis that depression and anxiety contributed to Okuno’s disabling conditions. After exhausting her administrative appeals, Okuno brought a claim under the Employee Retirement Income Security Act (ERISA). 29 U.S.C. 1132(a)(1)(B). The district court found in favor of Reliance on cross-motions for judgment on the administrative record. The Sixth Circuit reversed, reasoning that her physical ailments, including Crohn’s disease, narcolepsy, and Sjogren’s syndrome, are disabling when considered apart from any mental component. View "Okuno v. Reliance Standard Life Ins. Co." on Justia Law

Harrogate, a healthcare provider, participates in Blue Cross networks. Harrogate’s patients sign an “Assignment of Benefits,” allowing Harrogate to bill Blue Cross directly for services. The Provider Agreement allows Blue Cross to perform post-payment audits and recoup overpayments from Harrogate. Blue Cross paid Harrogate's claims for antigen leukocyte cellular antibody (ALCAT) tests, which purport to identify certain food allergies. Blue Cross claims that these tests have “little or no scientific rationale.” Investigational treatments are not “covered, compensable services” under Blue Cross’s Manual, which is incorporated by reference into the Provider Agreement. That Agreement also specifies that Harrogate may not “back-bill” patients for un-reimbursed, investigational treatments unless, before rendering such services, “the Provider has entered into a procedure-specific written agreement with the Member, which has advised the Member of his/her payment responsibilities.” Blue Cross began recouping ALCAT payments. Harrogate filed suit under the Employee Retirement Income Security Act. The district court dismissed, holding that Harrogate did not meet the statutory definition of “beneficiary” and had not received a valid assignment for the purpose of conferring derivative standing to bring suit under ERISA. The Seventh Circuit affirmed. While Harrogate had derivative standing through an assignment of benefits, its claim regarding recoupments falls outside the scope of that assignment. View "Brown v. BlueCross BlueShield of Tenn., Inc." on Justia Law

In 2011, Hogan sued the Life Insurance Company of North America for violating the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001, by denying her benefits claim under a disability insurance policy. The Sixth Circuit affirmed the grant of judgment against her. While appeal was pending, Hogan filed a state court suit against two nurses who worked for the Life Insurance Company and who had provided opinions regarding Hogan’s eligibility for benefits after reviewing her claim. Hogan carefully pleaded her claims in the second suit to avoid reference to the Life Insurance Company or ERISA, alleging only that the nurses committed negligence per se by giving medical advice without being licensed under Kentucky’s medical-licensure laws. The defendants removed the case to federal court on the basis of ERISA’s complete-preemptive effect. The district court denied Hogan’s attempts to remand the case to state court and later granted the defendants’ motion to dismiss. The Sixth Circuit affirmed the denial of remand and the dismissal. Hogan’s artfully pleaded state-law claims are simply claims for the wrongful denial of benefits under an ERISA plan that arise solely from the relationship created by that plan. The court denied defendants’ motion for sanctions on appeal because Hogan’s arguments were not frivolous. View "Hogan v. Jacobson" on Justia Law

During negotiations, Rubber Associates proposed to the Union that it decrease its contribution rate to the United Food and Commercial Workers Union Employer Pension Fund (governed by the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001) from 62 cents per hour to 30 cents per hour. The Fund’s actuary opined that collecting withdrawal liability would result in a better funding status for the Fund than accepting reduced contributions. Rubber Associates agreed to maintain its previous contribution rate. Negotiations resumed without success. The Union authorized a strike, which lasted for 17 months. After the Union unilaterally disclaimed interest in representing its employees, Rubber Associates was deemed to have withdrawn from the Fund, pursuant to the Multiemployer Pension Protection Amendments Act (MPPAA). The Fund calculated Rubber Associates’ withdrawal liability obligation at $1,713,169, which the arbitrator awarded in full. The Fund sued to enforce the award. Rubber Associates counterclaimed that, because withdrawal from the Fund was union-mandated, its liability should be calculated by an alternate method, making its liability only $312,000. The Sixth Circuit affirmed dismissal of the counterclaim, declining to recognize a claim under the federal common law of ERISA for equitable relief in the case of union-mandated withdrawals. View "United Food & Commercial Workers v. Rubber Assocs., Inc." on Justia Law