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

As an assembler with Eaton Corporation, McClain purchased the highest level of long-term disability insurance, which was “designed to replace ... 70 percent of [her] monthly base pay.” She stopped working in January 2008, due to a back injury she suffered on the job in June 2007. She received benefits during the first 24 months under the First Tier of the Plan’s coverage, which defined disability as being “totally and continuously unable to perform the essential duties of your regular position with the Company, or the duties of any suitable alternative position with the Company.” After 24 months, the Plan to an “any occupation” standard, providing Second Tier coverage if “you are totally and continuously unable to engage in any occupation or perform any work for compensation or profit for which you are, or may become, reasonably well fit by reason of education, training or experience--at Eaton or elsewhere.” The Plan denied her claim for benefits because her treating physician opined McClain could work part-time, and a market study identified various part-time positions in the area for which she was qualified. The district court rejected her suit under the Employee Retirement Income Security Act, 29 U.S.C. 1001. The Seventh Circuit affirmed, finding that the determination was not arbitrary.View "McClain v. Eaton Corp. Disability Plan" on Justia Law

In 2000, Rochow sold his interest in Universico to Gallagher and became President of Gallagher. As an employee of Gallagher, Rochow was covered under a LINA disability policy. In 2001, Rochow began to experience short term memory loss, chills, sweating, and stress at work. Gallagher demoted Rochow to Sales Executive-Account Manager. Because of his inability to perform his job, Gallagher forced Rochow to resign in January, 2002. In February 2002, Rochow experienced amnesia, was hospitalized, and was diagnosed with HSV-Encephalitis, a rare, severely debilitating brain infection. LINA repeatedly denied Rochow benefits stating that Rochow’s employment ended before his disability began. In 2004, Rochow sued Cigna, LINA’s parent company, alleging breach of fiduciary duty under ERISA, 29 U.S.C.1104(a). In 2007 the Sixth Circuit affirmed a decision that denial of Rochow’s claims was arbitrary, not the result of a deliberate, principled reasoning process, and did not appear to have been made solely in the interest of the participants and beneficiaries or the exclusive purpose of providing benefits to participants and beneficiaries as required by ERISA. Rochow died in 2008. In 2009, the district court ordered an equitable accounting of profits and disgorgement of $3,797,867.92 under an equitable theory of unjust enrichment. The Sixth Circuit affirmed. View "Rochowl v. Life Ins. Co. of N. America" on Justia Law

GM provides its salaried retirees with continuing life insurance benefits under an ERISA-governed plan. MetLife issued the group life insurance policy and periodically sent letters to participants advising them of the status of their benefits. The plaintiffs, participants in the plan, allege that those letters falsely stated that their continuing life insurance benefits would remain in effect for their lives, without cost to them. GM reduced their continuing life insurance benefits as part of its 2009 Chapter 11 reorganization. The plaintiffs sued MetLife under the Employee Retirement Income Security Act of 1974, 29 U.S.C. 1132(a)(2) & (a)(3) and state law. The district court dismissed. The Sixth Circuit affirmed. MetLife did not tell participants that the benefits were fully paid up or vested upon retirement, but that their benefits would be in effect for their lifetimes, which “was undeniably true under the terms of GM’s then-existing plan.” The court rejected claims of estoppel, of breach of fiduciary duty, unjust enrichment, breach of plan terms, and restitution. View "Merrill Haviland v. Metro. Life Ins. Co." on Justia Law

Retirees, dependents of retirees, and the union filed a class action suit against the retirees’ former employer, M&G, after M&G announced that they would be required to make health care contributions. The district court found M&G liable for violating a labor agreement and an employee welfare benefit plan and ordered reinstatement of the plaintiffs to the current versions of the benefits plans they were enrolled in until 2007, to receive health care for life without contributions. The Sixth Circuit affirmed. The district court properly concluded that the retirees’ right to lifetime healthcare vested upon retirement after concluding that documents, indicating agreement between the union and the employers to “cap” health benefits and several “side” letters were not a part of the applicable labor agreements. View "Tackett v. M&G Polymers USA, LLC," on Justia Law

Like many Michigan municipalities, Pontiac has experienced significant economic difficulties, especially since 2008. Michigan’s Governor appointed Schimmel as Pontiac’s emergency manager. Acting under Michigan’s then-existing emergency manager law (Public Act 4), in 2011, Schimmel modified the collective bargaining agreements of Pontiac’s retired employees and modified severance benefits, including pension benefits, that Pontiac had given retirees not covered by collective bargaining agreements. The retired employees claim that Schimmel and Pontiac violated their rights under the Contracts Clause, the Due Process Clause, and the Bankruptcy Clause. The district court denied the retirees an injunction. The Sixth Circuit vacated and remanded for expedited consideration of state law issues. Michigan voters have since rejected Public Act 4 by referendum, which may have rendered Schimmel’s actions void.The court also questioned whether two-thirds of both houses of the Michigan Legislature voted to make Public Act 4 immediately effective. The court noted that similar issues face many Michigan municipalities. View "City of Pontiac Retired Emps. Ass'n v. Schimmel" on Justia Law

Findlay sought relief from a withdrawal liability payment it allegedly owed the pension fund under the Multiemployer Pension Plan Amendments Act of 1980, 29 U.S.C. 1381-1461. Findlay had ceased making contributions to a pension plan administered by the fund as the result of a labor dispute. About three months after the strike began, the fund demanded Findlay pay withdrawal liability of more than $10 million. Findlay contended that withdrawal liability was improper because withdrawal occurred as the result of a labor dispute; that despite the Act’s arbitration requirement, it should not be forced to arbitrate the dispute because the withdrawal was “union-mandated;” and that despite the Act’s interim payment requirement, it should not be forced to make interim payments because doing so would cause it to suffer irreparable harm. The district court dismissed, holding that the Act required the dispute be arbitrated, and enjoined the fund from collecting withdrawal liability payments pending arbitration. The Sixth Circuit affirmed the dismissal, but reversed the injunction, stating that creating an exception to interim payments for employers that would suffer irreparable harm would contradict the congressional purpose of protecting funds from undercapitalized or financially precarious employers. View "Findlay Truck Line, Inc. v. Cen. States SE & SW Areas Pension Fund" on Justia Law

Frazier, a sorter for Publishers Printing, was covered by Publishers’ employee benefit plan, which provided disability insurance. In 2009, at age 42, she left her job due to back pain that radiated down her legs, which she thought was caused by arthritis and a bulging disc, though she could not remember any fall or injury that initiated the pain. An MRI revealed mild disc dislocation. Her family physician diagnosed her with lower back pain and radiculopathy and in 2010 opined that Frazier was unable to return to work at regular capacity. Frazier participated in limited physical therapy. Another physician prescribed lumbar epidural injections and eventually permitted her to return to work. The plan denied Frazier’s claim for long-term disability benefits after reviewing medical evidence and job descriptions from Publishers and the U.S. Department of Labor. A Functional Capacity Evaluation indicated that Frazier “is currently functionally capable of meeting the lower demands for the Medium Physical Demand level on a 8 hour per day.” Frazier sued under the Employee Retirement Income Security Act, 29 U.S.C. 1001. The district court granted judgment for the plan, reasoning that the administrator had discretion to deny Frazier’s claim, and that denial of benefits was not arbitrary. The Sixth Circuit affirmed. View "Frazier v. Life Ins. Co. of N. Am." on Justia Law

The plant’s union and TRW negotiated collective bargaining agreements, which included provisions for healthcare benefits for retirees. The last CBA became effective in 1993 and was scheduled to expire in 1996. The plant closed in 1997. TRW and the union entered into a termination agreement that provided that any beneficiary, who is receiving or entitled to receive any payment and/or benefit under the CBA, “shall continue to receive or be entitled to receive such payment and/or benefit as though the CBA and Pension Plan had remained in effect.” In 2011, TRW terminated prescription drug coverage for Medicare-eligible retirees, replacing it with an annual contribution to a health reimbursement account. Plaintiffs claimed that this change modified their benefits in violation of TRW’s contractual obligation and filed a purported class action under the Labor Management Relations Act, 29 U.S.C. 185(a), and a claim for benefits under the Employment Retirement Income Security Act, 29 U.S.C. 1132(a)(1)(B). The district court granted TRW’s motion to compel arbitration. The Sixth Circuit affirmed as to the two named Plaintiffs, declining to address the rights of hypothetical plaintiffs. View "VanPamel v. TRW Vehicle Safety Sys., Inc." on Justia Law

The Fund is a multi-employer trust fund under the Taft-Hartley Act, 29 U.S.C. 186, and the Employee Retirement Income Security Act, 29 U.S.C. 1001. Blue Cross is a Michigan non-profit corporation; its enabling statute authorizes the State Insurance Commissioner to require it to pay a cost transfer of one percent of its “earned subscription income” to the state for use to pay costs beyond what Medicare covers. In 2002 the Fund converted to a self-funded plan, and entered into an Administrative Services Contract with Blue Cross, which states that Blue Cross is not the Plan Administrator, Plan Sponsor, or fiduciary under ERISA; its obligations are limited to processing and paying claims. In 2004 the Fund sued, claiming that Blue Cross breached ERISA fiduciary duties by imposing and failing to disclose a cost transfer subsidy fee to subsidize coverage for non-group clients. The fee was regularly collected from group clients. Self-insured clients were not always required to pay it. Following a first remand, the district court granted class certification and granted the Fund summary judgment. On a second remand, the court again granted judgment on the fee imposition claim and awarded damages of $284,970.84 plus $106,960.78 in prejudgment interest. The Sixth Circuit affirmed. View "Pipefitters Local 636 Ins. Fund v. Blue Cross & Blue Shield of MI" on Justia Law

Engleson, vice president of an Akron insurance agency, suffered from medical conditions, including Crohn’s disease and depression. He resigned in 2001 and sought long-term disability benefits from the company’s group plan, managed by Unum. Unum denied his claim weeks later, reasoning that Engleson’s clinical documentation did not establish that his symptoms were so debilitating that he was precluded from working. Unum denied an appeal in October, 2001 and a second appeal with additional supporting information in November, 2001. In 2007, Engleson returned to Ohio and to the agency, but in August, 2008, he filed another claim for disability benefits. Unum granted his request, with the date of disability denoted as August 5, 2008. Unum would not provide additional appeal review of the 2001 claim. Engleson filed suit in 2009, under 29 U.S.C. 1132(a)(1)(B) and the Employee Retirement Income Security Act, alleging that he was not afforded a full and fair review of his claim and that Unum breached its fiduciary duties. The district court held that the three-year contractual limitations period barred the suit with respect to his 2001 claim. The Sixth Circuit affirmed, holding that the untimely filing was not excusable. View "Engleson v. UNUM Life Ins. Co. of Am." on Justia Law