Source: https://www.lifeanddisabilitylaw.com/erisa-watch-court-recognizes-disabling-impact-of-fibromyalgia-in-long-term-disability-case/
Timestamp: 2019-04-18 10:53:42+00:00

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This week’s notable decision is out of the Seventh Circuit Court of Appeals in Kennedy v. The Lilly Extended Disability Plan, No. 16-2314, __F.3d__, 2017 WL 2178091 (7th Cir. May 18, 2017), where the court recognizes the seriousness and validity of fibromyalgia.
In Kennedy, the plaintiff worked as the executive director of Lilly’s human resources division, earning a monthly salary of $25,011. But due to disabling symptoms related to fibromyalgia, Kennedy was forced to stop working. Lilly had a self-funded extended disability benefit plan which paid Kennedy benefits for three and a half years later, only to terminate her claim based on a five-minute in person examination by Dr. Robert Schriber in Dayton, Ohio (more than 100 miles from Kennedy’s home in Indianapolis) and a medical record review by Dr. Ara Dikranian, a rheumatologist. Kennedy’s treating doctors all supported her disability based on fibromyalgia, and one doctor commended her for her consistency and lack of attempt to over dramatize her limitations. The district court granted summary judgment in favor of Kennedy and awarded her $537,843.81 in past benefits and pre-judgment interest. Lilly appealed.
Greenbrier Hotel Corp. v. Unite Here Health, No. 5:13-CV-11644, 2017 WL 2058222 (S.D.W. Va. May 12, 2017) (Judge Irene C. Berger). The court previously awarded Greenbrier $5,503,181.00 after it filed suit against Defendant for failing to transfer any of Greenbrier’s assets after Greenbrier changed unions and switched to a self-funded health benefits plan in 2013. The court awarded combined attorneys’ fees to Plaintiffs totaling $1,525,068.10. The court awarded expenses in the amount of $152,526.48.
Montoya v. Reliance Standard Life Ins. Co., No. 14-CV-02740-WHO, 2017 WL 2081163 (N.D. Cal. May 15, 2017) (Judge William H. Orrick). Following the court’s grant of summary judgment to Plaintiff on his “own occupation” long term disability claim, Plaintiff sought an award of $238,455 in attorney’s fees against Reliance. The court found Plaintiff entitled to fees but not in the amount sought. Plaintiff’s attorney was awarded the hourly rate of $650 for time through May 2015 and $675 for time thereafter. The court awarded most of the hours sought.
Lash v. Reliance Standard Life Ins. Co., No. CV 16-235, 2017 WL 2180301 (E.D. Pa. May 18, 2017) (Judge John R. Padova). This lawsuit involves a denial of long term disability benefits. The court granted Reliance’s motion to dismiss Temple’s crossclaim insofar as it seeks contribution and indemnification from Reliance for Plaintiff’s § 1132(c) claim since a non-plan administrator may not be held liable for statutory penalties sought pursuant to § 1132(c). The court denied Reliance’s motion to dismiss Temple’s claim seeking contribution and indemnification from Reliance for § 1132(a)(3), following District Court decisions within the Third Circuit finding a right of contribution and indemnification exists between fiduciaries in the ERISA context. The Third Circuit has not decided this issue and other Courts of Appeals are divided on the issue.
Ahrens v. UCB Holdings, Inc., 1:15-cv-348-TWT, D.E. #75 (N.D. Ga. May 19, 2017) (Judge Thomas W. Thrash, Jr.). In this action challenging Defendant’s decision to exclude from the UCB, Inc. Defined Benefit Pension Plan credit for years of service at Northampton or Whitby, the court approved a class action settlement for $5.5 million. The court also awarded attorneys’ fees equal to 27% of the $5.5 million common fund and reimbursement of expenses of $39,412.64. Lead counsel for the Class is R. Joseph Barton of Block & Leviton LLP and Joseph Creitz of Creitz & Serebin LLP. More information about the case and settlement is available at www.ucbpensionsettlement.com.
Barber v. Lincoln Nat’l Life Ins. Co., No. 3:17-CV-00034-JHM, 2017 WL 2126330 (W.D. Ky. May 16, 2017) (Judge Joseph H. McKinley, Jr.). The court determined that Lincoln’s decision to reduce Plaintiff’s monthly benefit due to his political consulting income is supported by the plain text of the policy. It did not matter whether or not the work was done in his own occupation of “litigator.” Plaintiff also alleged a violation of ERISA Section 502(a)(3) based on Lincoln’s offsetting of Plaintiff’s monthly benefit without first waiting until he had reported his other income for federal income tax purposes. The court determined that Plaintiff had standing to bring this claim, but since the claim is policy-based as opposed to statutory-based, exhaustion of administrative remedies is required. Since Plaintiff did not file an appeal within 180 days, which has now passed, the court dismissed this claim with prejudice.
Kennedy v. The Lilly Extended Disability Plan, No. 16-2314, __F.3d__, 2017 WL 2178091 (7th Cir. May 18, 2017) (Before POSNER, MANION, and HAMILTON, Circuit Judges). The court affirmed the district court’s grant of summary judgment in favor of Plaintiff, whom it agreed was disabled by fibromyalgia. Notably, the court stated, “There used to be considerable skepticism that fibromyalgia was a real disease. No more.” The court rejected an opinion from Dr. Schriber in Dayton, Ohio, based on the false statement that the American College of Rheumatology does not consider fibromyalgia to be disabling on a long-term basis. “By cutting off Kennedy’s benefits the company has saved itself about $2.5 million. Big as Lilly is, that’s not a trivial loss.” Judge Manion dissented.
McIntyre v. Aetna Life Ins. Co., No. EDCVJGB152103DTBX, 2017 WL 1969467 (C.D. Cal. May 12, 2017) (Judge Jesus G. Bernal). On de novo review, the court determined that Plaintiff, a sales Associate for Home Depot for nine years, was permanently disabled and entitled to long term disability benefits. The court found that Plaintiff provided sufficient medical findings of permanent disability, Plaintiff’s doctors considered Aetna’s definition of sedentary work capacity and drew consistent conclusions (they did not base their conclusions on his ability to perform his sales associate job at Home Depot), and Aetna’s bases for denying Plaintiff’s disability claim are unreasonable.
Prelutsky v. Greater Georgia Life Insurance Company, No. 1:15-CV-628-WSD, 2017 WL 2115894 (N.D. Ga. May 16, 2017) (Judge William S. Duffey, Jr.). The court previously issued an order reversing Defendant’s decision to deny long term disability benefits based on its finding that Defendant failed to perform an investigation sufficient to support that Plaintiff’s disability was caused by, resulted from or related to his intoxication. Plaintiff sought attorneys’ fees, which Defendant opposed. The court found that although Plaintiff did agree some degree of success on the merits, Defendant did not deny benefits or engage in litigation in bad faith. As such, the court denied attorneys’ fees but did award prejudgment interest at the rate of 6.5%.
Saginaw Chippewa Indian Tribe of Michigan v. Blue Cross Blue Shield of Michigan, No. 16-CV-10317, 2017 WL 2115679 (E.D. Mich. May 16, 2017) (Judge Thomas L. Ludington). In this case where Plaintiff alleges that Blue Cross charged a self-insured plan hidden fees, the court overruled Plaintiff’s objections to the Magistrate Judge’s denial of the motion to compel discovery related to the rate of return on BCBSM’s investments (to determine prejudgment interest once liability is established) and denial of BCBSM’s motion to strike the prejudgment interest rate analysis of Plaintiff’s expert, Neil Steinkamp.
Mcculloch Orthopaedic Surgical Services v. Aetna Inc., No. 15-2150-CV, __F.3d__, 2017 WL 2173651 (2d Cir. May 18, 2017) (Before: WALKER, CALABRESI, and HALL, Circuit Judges). ERISA does not completely preempt an “out-of-network” health care provider’s promissory-estoppel claim against a health insurer where the provider (1) did not receive a valid assignment for payment under the health care plan and (2) received an independent promise from the insurer that he would be paid for certain medical services provided to the insured.
England v. Hartford Fin. Grp., Inc., No. 1:16-CV-00153-GNS, 2017 WL 2177971 (W.D. Ky. May 17, 2017) (Judge Greg N. Stivers). The court found that the long term disability policy is a qualified ERISA plan because the Policy language clearly indicates that Johnson Controls established and maintained the Policy with the intent of providing benefits to its employees, and that the safe harbor provisions do not apply. Plaintiff’s claims under the Kentucky Unfair Claims Settlement Practices Act, KRS 304.12-230 are preempted by ERISA. Plaintiff has thirty days to amend her Complaint.
Everett v. Metro. Life Ins. Co., No. 3:16-CV-00074-GNS-DW, 2017 WL 2126329 (W.D. Ky. May 16, 2017) (Judge Greg N. Stivers). In this case involving a challenge to a long term disability benefit denial, the court overruled Plaintiff’s objections that the Magistrate Judge: (1) erred when he found ERISA completely preempted his Kentucky Unfair Claims Settlement Practices Act claim; (2) did not properly apply the Saving Clause of ERISA’s express preemption provision, 29 U.S.C § 1144(b)(2)(A); and (3) improperly distinguished Harrison v. TEAMCARE-A Central States Health Plan, 187 F. Supp. 3d 812 (E.D. Ky. 2016).
Carson v. Am. Quality Sch. Corp. Thea Bowman Leadership Acad., No. 2:15CV348-PPS, 2017 WL 2168369 (N.D. Ind. May 17, 2017) (Judge Philip P. Simon). The court denied summary judgment of United of Omaha because it found a genuine dispute as to the date on which the insured applied for voluntary term life insurance, which would determine whether proof of good health (which was not submitted) was required for coverage. The court denied the plan sponsor’s motion for summary judgment. The court found the plan sponsor was a fiduciary. Plaintiff can have a claim for benefits against United of Omaha and an equitable relief claim against the plan sponsor to remedy a breach of fiduciary by the plan sponsor if it caused the denial of life insurance benefits.
Bjelopetrovich v. UNUM life Ins. Co. of Am., No. 16 C 4393, 2017 WL 2152410 (N.D. Ill. May 17, 2017) (Judge Elaine E. Bucklo). The court granted summary judgment in favor of Unum because the only reasonable construction of the life insurance plan compels a finding that the insured was required to submit for Defendant’s approval an “evidence of insurability” form to obtain the coverage promising the benefits. Since the insured did not provide this form, Unum correctly determined that coverage for voluntary life insurance benefits was never triggered.
Metropolitan Life Insurance Company v. Sanchez, No. 2:16-CV-00787-MCE-AC, 2017 WL 2081794 (E.D. Cal. May 15, 2017). In this matter where MetLife concluded that it was unclear as to whether Decedent intended to name only his three children as the beneficiaries of the Plan benefits, as he did for his 401(k), or instead whether he intended to keep his three children and his former wife as equal beneficiaries, the court granted MetLife’s motion for interpleader dismissal and discharge and awarded its reasonable attorneys’ fees.
Strang v. Ford Motor Company General Retirement Plan, No. 16-2090, __F.App’x__, 2017 WL 2210925 (6th Cir. May 19, 2017) (BEFORE: BOGGS, MOORE, and McKEAGUE, Circuit Judges). In this case where Plaintiff’s deceased husband made several attempts to elect a lump sum distribution of his pension benefit before his death, but had not submitted a complete and valid election form during his election period as he had died before his election period began, the court affirmed the Defendant’s decision to deny the lump sum benefit since his attempt to elect a lump-sum payment was ineffective under the terms of the plan. The court affirmed dismissal of the breach of fiduciary duty claim since it is based on the same injury as the denial of benefits claim.
Westrock Rkt Company v. Pace Industry Union- Management Pension Fund, Board Of Trustees Of The Pace Industry Union-Managment Pension Fund, No. 16-16443, __F.3d__, 2017 WL 2111114 (11th Cir. May 16, 2017) (Before WILSON and ANDERSON, Circuit Judges, and ROTHSTEIN,* District Judge). In this case the Board amended the Fund’s rehabilitation plan to include a provision requiring an employer that withdraws from the Fund to pay a portion of the Fund’s accumulated funding deficiency. The court held that WestRock has not properly alleged that the Amendment violates § 1085 in a manner sufficient to bring a cause of action under Subsection B of § 1132(a)(10). The court affirmed the district court’s ruling because WestRock has not pleaded the requisite injuries to satisfy bringing a cause of action under 29 U.S.C. §§ 1132(a)(10) or 1451(a).
Boyle, D.M.D. v. Penn Dental Medicine, et al., No. 16-3621, __F.App’x__, 2017 WL 2210919 (3d Cir. May 19, 2017) (Before: AMBRO, RESTREPO, and COWEN, Circuit Judges). The court affirmed the grant of summary judgment to Defendants on Plaintiff’s Section 510 claim, explaining that a finding of pretext with respect to Plaintiff’s ADEA claim would not necessarily require reversal as to her ERISA claim because the latter requires a showing of “specific intent to violate ERISA.” Further, Plaintiff did not identify any ERISA-covered retirement benefits that would have vested absent her termination.
Pension Benefit Guar. Corp. v. Idaho Hyperbarics, Inc., No. 4:16-CV-00325-CWD, 2017 WL 2125743 (D. Idaho May 15, 2017) (Magistrate Judge Candy W. Dale). PBGC’s complaint, brought under Section 1303(e)(1) following IHI’s standard termination of its single-employer, defined benefit pension plan, and which alleges that IHI violated Title IV of ERISA and applicable regulations by failing to distribute Plan assets in full satisfaction of the Plan’s benefit liabilities, is not barred by the statute of limitations. The statute of limitations is not triggered until some violation of ERISA or PBGC regulations occurs and PBGC’s cause of action is based upon the results of its investigation finding IHI failed to pay plan participants benefits owed in connection with termination of its Plan.
Easter v. Cayuga Medical Center at Ithaca, 5:14-cv-01403-BKS-TWD, D.E. #82 (N.D.N.Y. May 17, 2017) (Judge Brenda K. Sannes). Following a bench trial, the court imposed a penalty under ERISA § 502(a)(1)(A) of $47,460 against Defendant CMC, payable to Plaintiff. The court found that despite repeated requests for the PPO Contract (which contained the coverage information that Plaintiff sought), Excellus did not produce it until discovery for this litigation. The court determined that attorney time was expended trying to get the PPO Contract and credited Plaintiff’s testimony that she suffered anxiety and stress. The court concluded that CMC’s delay was intentional, it was not produced for 708 days, Plaintiff made four requests for the PPO Contract, the PPO Contract was of significant importance, and Plaintiff was prejudiced. The court charged only $70 (instead of the max $110) for 678 days.
Culver v. United Commerce Centers, Inc., No. 3:16-CV-01055-M, 2017 WL 2118402 (N.D. Tex. May 16, 2017) (Judge Barbara M.G. Lynn). Because there are genuine issues of material fact as to whether Plaintiffs were entitled to COBRA notice (i.e., whether there was gross misconduct), whether the separation agreement bars the claim, whether Defendants acted inconsistently with their current position as to the reasons for termination and are therefore estopped, and whether New World International and National Auto Parts are plan sponsors, the court found summary judgment is improper.
Schwartz v. Employee Benefit Management Systems, et al., No. CV17656SDWLDW, 2017 WL 2119446 (D.N.J. May 16, 2017) (Judge Susan D. Wigenton). The court dismissed the case for improper venue. The Plan is administered in Montana so the decision to partially deny reimbursement occurred in Montana. Any alleged breach therefore took place in Montana. It is not sufficient for venue for Plaintiff to allege that she provided patient’s treatments in New Jersey and she received Defendants’ partial reimbursements in New Jersey.

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