Justia U.S. 11th Circuit Court of Appeals Opinion Summaries

Ariel Torres, a former Starbucks employee, and Raphyr Lubin, the husband of another former Starbucks employee, filed a putative class action against Starbucks. They alleged that Starbucks sent them deficient health-insurance notices under the Employee Retirement Income Security Act (ERISA), as amended by the Consolidated Omnibus Budget Reconciliation Act (COBRA). Starbucks moved to compel arbitration based on employment agreements signed by Torres and Lubin’s wife. Torres agreed to arbitration, but Lubin opposed it, arguing he was not a party to his wife’s employment agreement.The United States District Court for the Middle District of Florida denied Starbucks’s motion to compel arbitration for Lubin. The court found that Lubin was not a party to his wife’s employment agreement and was not suing to enforce it. Instead, Lubin sought to enforce his own statutory right to an adequate COBRA notice. The court held that no equitable doctrine of Florida contract law required Lubin to arbitrate and that Starbucks waived its argument that Lubin’s rights were derivative of his wife’s rights.The United States Court of Appeals for the Eleventh Circuit reviewed the case and affirmed the district court’s decision. The court held that Lubin, not being a party to the arbitration agreement, could not be compelled to arbitrate. The court also found that the arbitration agreement’s delegation clause did not apply to Lubin, as he was not a party to the agreement. Additionally, the court rejected Starbucks’s arguments based on equitable estoppel, third-party beneficiary doctrine, and the derivative claim theory, concluding that none of these principles required Lubin to arbitrate his claim. The court affirmed the district court’s order denying Starbucks’s motion to compel arbitration. View "Lubin v. Starbucks Corporation" on Justia Law

Eric and Todd Romano, trustees of the Romano Law, PL 401(k) Plan, filed a class action against John Hancock Life Insurance Company. They claimed that John Hancock breached its fiduciary duties under the Employee Retirement Income Security Act of 1974 (ERISA) by not passing through the value of foreign tax credits received from mutual funds to the defined-contribution plans. The Romanos argued that John Hancock should have used these credits to reduce the administrative fees charged to the plans.The United States District Court for the Southern District of Florida granted summary judgment in favor of John Hancock, concluding that John Hancock was not an ERISA fiduciary regarding the foreign tax credits and did not breach any fiduciary duties. The court also ruled that the Romanos and the class lacked Article III standing because they failed to establish loss causation.The United States Court of Appeals for the Eleventh Circuit reviewed the case and affirmed the district court's decision. The appellate court held that John Hancock was not an ERISA fiduciary concerning the foreign tax credits because these credits were not plan assets. The court explained that the foreign tax credits were a result of John Hancock's ownership of mutual fund shares and were not held in trust for the benefit of the plans. Additionally, the court found that John Hancock did not have discretionary authority over the management or administration of the separate accounts that would make it a fiduciary under ERISA. Consequently, the Romanos' claims for breach of fiduciary duty and engaging in prohibited transactions failed as a matter of law. View "Romano v. John Hancock Life Insurance Company (USA)" on Justia Law

The case involves a class of current and former Home Depot employees who alleged that Home Depot failed to prudently manage its 401(k) retirement plan, resulting in excessive fees and subpar returns. The plaintiffs argued that Home Depot did not adequately monitor the fees charged by the plan’s financial advisor and failed to prudently evaluate four specific investment options, leading to financial losses for the plan participants.The United States District Court for the Northern District of Georgia found that there were genuine disputes of material fact regarding whether Home Depot had complied with its duty of prudence in monitoring plan fees and three of the four challenged funds. However, the court concluded that the plaintiffs had not met their burden of proving loss causation for any of their claims. The court also found no genuine dispute regarding the prudence of Home Depot’s monitoring process for the Stephens Fund and ruled that the plaintiffs had forfeited their requests for equitable relief by not arguing them at the summary judgment stage.The United States Court of Appeals for the Eleventh Circuit affirmed the district court’s decision. The court held that the plaintiffs bear the burden of proving loss causation in ERISA breach-of-fiduciary-duty claims. The court found that the plaintiffs failed to show that the fees charged by the financial advisors were objectively imprudent, given the size and complexity of Home Depot’s plan. The court also determined that the plaintiffs did not provide sufficient evidence to prove that the four challenged funds were objectively imprudent investments. Additionally, the court agreed with the district court that the plaintiffs had forfeited their claims for equitable relief by not raising them at the summary judgment stage. Therefore, the court affirmed the district court’s grant of summary judgment in favor of Home Depot. View "Pizarro v. The Home Depot, Inc." on Justia Law

The case involves two brothers, Levi and Benjamin Goldfarb, who sought payment of a $500,000 claim under an Accidental Death & Dismemberment insurance policy after their father, Dr. Alexander Goldfarb, died while mountain climbing in Pakistan. The insurer, Reliance Standard Life Insurance Company, denied the claim because the cause of Dr. Goldfarb’s death was unknown, and therefore, his beneficiaries could not show that he died by accident. The Goldfarb brothers challenged the denial in district court under the Employee Retirement Security Act.The district court ruled in favor of the Goldfarbs, stating that Dr. Goldfarb’s death was accidental and that Reliance Standard’s failure to pay the Accidental Death & Dismemberment claim was arbitrary and capricious. The court granted summary judgment to the Goldfarbs and denied Reliance Standard’s cross motion for summary judgment. Reliance Standard appealed this decision.The United States Court of Appeals for the Eleventh Circuit disagreed with the district court's decision. The appellate court found that Reliance Standard’s decision that Dr. Goldfarb’s death was not accidental under the insurance policy was supported by reasonable grounds, and the denial of the Goldfarbs’ claim for benefits was not arbitrary and capricious. Therefore, the court reversed the district court’s grant of summary judgment to the Goldfarbs and directed the court to enter judgment in Reliance Standard’s favor. View "Goldfarb v. Reliance Standard Life Insurance Co." on Justia Law

Subscribers who bought health insurance filed a class action against Blue Cross, alleging that it violated the Sherman Antitrust Act by restricting the member plans’ ability to compete. At issue is whether the district court abused its discretion in approving a settlement agreement for a multi-district antitrust class action against the Blue Cross Blue Shield Association and its member plans.   The Eleventh Circuit affirmed. The court explained that the self-funded claimants were represented by their own counsel and class representatives in the settlement negotiations and received some compensation from the settlement. Although the settlement agreement’s allocation is facially unequal, it is not facially unfair. Further, the court held that the record supports the conclusion that the self-funded claimants and the fully insured claimants had at least potentially adverse interests. The district court did not abuse its discretion in dividing them into subclasses. Moreover, the court found that the district court also correctly applied the percentage-ofthe-fund doctrine. View "In Re: Blue Cross Blue Shield Antitrust Litigation" on Justia Law

Under the Employment Retirement Income Security Act, 29 U.S.C. Section 1132(a)(1)(B), a plan administrator’s benefits decision is subject to plenary review in federal court unless the administrator is given discretion to determine eligibility or construe the terms of the plan. If the administrator has discretion, a court determines whether its benefits decision was arbitrary and capricious (i.e., whether it lacked a reasonable basis).   In this ERISA case, all parties agree that Lincoln’s denial of long-term disability benefits to Plaintiff triggered de novo review because the plan did not give Lincoln discretion. The district court, acknowledging that its review of the denial was plenary, ruled that Plaintiff could not submit evidence that had not been presented to Lincoln before it denied benefits.   The Eleventh Circuit reversed holding that the district court’s evidentiary ruling constituted error under Eleventh Circuit precedent. The court explained that Lincoln also argues that even under Moon and Kirwan an ERISA plaintiff does not have the unfettered right to introduce new evidence when challenging the denial of benefits under plenary review. However, the court explained it has never mentioned, a showing of good cause to present new evidence in ERISA benefit cases governed by the de novo standard. Further, although Lincoln that under plenary review the administrative record supports the denial of long-term disability benefits to Plaintiff, the court cannot, however, affirm on this basis. Accordingly, the district court erred by not considering Plaintiff's post-denial evidence, and Lincoln does not assert that this error was harmless. View "Virgil Harris v. The Lincoln National Life Insurance Company, et al" on Justia Law

Plaintiff’s spouse was a medical doctor employed by NCHMD, Inc., which is a subsidiary of NCH Healthcare System, Inc. NCHMD’s human resources staff helped the spouse complete enrollment paperwork for life insurance benefits through an ERISA plan. Plaintiff was the primary beneficiary under the plan, and NCH Healthcare was the named plan administrator. After Plaintiff’s spouse died, Plaintiff filed a claim for benefits with the plan’s insurance company. The insurance company refused to pay any supplemental benefits because it had never received the form. Plaintiff sued NCHMD and NCH Healthcare, asserting a claim under ERISA, 29 U.S.C. Section 1132(a)(1)(B). The district court granted Defendants’ motion to dismiss and denied Plaintiff leave to amend.   On appeal, the Eleventh Circuit reversed the district court’s ruling. The court wrote that at issue is whether Section 1132(a)(3) creates a cause of action for an ERISA beneficiary to recover monetary benefits lost due to a fiduciary’s breach of fiduciary duty in the plan enrollment process? The court answered “yes”, and explained that under the court’s precedents, a court may order typical forms of equitable relief under Section 1132(a)(3). As the Supreme Court and many sister circuits have recognized, courts in equity could traditionally order an “equitable surcharge”— that a fiduciary pay a beneficiary for losses caused by the fiduciary’s breach of fiduciary duty. Accordingly, the court held that a beneficiary of an ERISA plan can bring a lawsuit under Section 1132(a)(3) against a fiduciary to recover benefits that were lost due to the fiduciary’s breach of its duties. View "Raniero Gimeno v. NCHMD, Inc., et al." on Justia Law

After Allstate decided to stop paying premiums on retired employees' life insurance policies, two putative classes filed suit seeking declaratory and injunctive relief. The Turner retirees are made up of retired former Allstate employees to whom Allstate no longer provides life insurance. The Klaas retirees consist of individuals who took part in a special retirement opportunity with Allstate.The Eleventh Circuit affirmed the district court's judgment in favor of Allstate, concluding that Allstate had the authority under the summary plan descriptions to terminate the retiree life insurance benefits for both putative classes and did not violate Section 502(a)(1)(B) of the Employee Retirement Income Security Act (ERISA). The court also concluded that any claims for breach of fiduciary duty brought under section 502(a)(3) were time barred. View "Klaas v. Allstate Insurance Co." on Justia Law

The Eleventh Circuit held that the Employment Retirement Income Security Act's (ERISA) fee-shifting provision, 29 U.S.C. 1132(g)(1), cannot support a fee award against a party's counsel. The court explained that the function of this statute is not to sanction attorney misconduct. Rather, that role belongs to other provisions, such as 28 U.S.C. 1927 and Federal Rule of Civil Procedure 11(c).In this case, the district court relied exclusively on Section 1132(g)(1) when awarding fees. Therefore, the court reversed and vacated the district court's fee award. The court did not address Liberty Life's argument that the district court should have imposed fees against Theresa E. Peer's counsel, Paul Sullivan. On remand, the district court may consider whether a fee award is appropriate against Peer under ERISA or against Peer or Sullivan under another statute, rule, or the district court's inherent authority. View "Sullivan v. Liberty Life Assurance Company of Boston" on Justia Law

Plaintiff, a dermatologist in Atlanta, Georgia, has filed many appeals in the Eleventh Circuit in recent years, all of which have involved her attempts to receive in-network payments despite being an out-of-network provider. These consolidated appeals arise from plaintiff's treatment of two patients who were insured under two separate employee welfare benefit plans which are administered by United. The Employee Retirement Income Security Act of 1974 (ERISA) covers both plans.The Eleventh Circuit affirmed the district court's dismissal of plaintiff's cases against Coca-Cola and Delta (defendants). The court concluded that, even assuming that waiver is available in the ERISA context, defendants did not waive their ability to assert the anti-assignment provisions as a defense. Furthermore, regardless of waiver, plaintiff's lawsuit still fails to state a claim: United paid her in full, both under the terms of the patients' assignments and the provisions of the healthcare plans. View "Griffin v. Coca-Cola Refreshments USA, Inc." on Justia Law