Laurel Hill Mgmt. Servs., Inc. v. La-Z-Boy Inc., No. 25-1727, __ F.4th __, 2026 WL 2427143 (6th Cir. Aug. 19, 2026) (Before Circuit Judges Gibbons, Murphy, and Hermandorfer)
This week’s notable decision from the Sixth Circuit involves the same recurring fact pattern the Ninth Circuit discussed just days earlier in our notable decision from last week, Healthcare Ally Management of California, LLC v. WSP USA, Inc.
In the fact pattern, an out-of-network healthcare provider relies on assurances made by an administrator of an ERISA-governed healthcare plan about reimbursement rates in an oral “verification call,” and is later paid less those rates. Can the provider bring state law claims for negligent misrepresentation or promissory estoppel against the insurer, or are those claims preempted by ERISA?
Last week the Ninth Circuit split the baby, allowing a negligent misrepresentation claim to survive ERISA preemption while barring a parallel promissory estoppel theory. As detailed below, the Sixth Circuit, even though faced with almost identical facts (and even identical plaintiff’s counsel) arrived at a very different result.
The case involved La-Z-Boy Inc.’s employee health plan, which is administered by Blue Cross Blue Shield of Michigan. In early 2022, one of the plan’s participants sought treatment from several out-of-network medical providers. The providers called Blue Cross to confirm coverage, and Blue Cross orally represented that reimbursement would be calculated at the “usual, customary, and reasonable” (UCR) rate. Blue Cross did not disclose any plan exclusions or limitations that might reduce that rate, and did not provide a copy of the controlling benefit plan.
Relying on that phone call, the providers rendered treatment and later submitted claims totaling $342,296. However, Blue Cross paid only $1,598.40, basing its reimbursement rate on Medicare’s fee schedule instead of UCR rates.
The providers sued La-Z-Boy in California state court, asserting state law claims for negligent misrepresentation and promissory estoppel. La-Z-Boy removed the case to federal court, and the case was transferred to the Eastern District of Michigan. The providers amended their complaint to add Blue Cross as a defendant, and then both defendants then moved to dismiss on ERISA preemption grounds.
The district court granted that motion, relying on the Sixth Circuit’s 1991 decision in Cromwell v. Equicor-Equitable HCA Corp. to hold that the providers’ claims “related to” La-Z-Boy’s plan and were therefore preempted. The district court dismissed the suit with prejudice, ignoring the providers’ cursory request for leave to amend at the end of their opposition. (Your ERISA Watch covered this ruling in our August 13, 2025 edition.)
The providers appealed and also filed a motion with the district court for leave to file a second amended complaint. The district court denied that motion, stating that it could not address the motion while the appeal was pending.
In this published decision the Sixth Circuit first addressed the providers’ contention that the appellate court should evaluate the allegations in their second amended complaint, not their first amended complaint. The court “decline[d] that invitation.” The court noted that when the providers’ claims were dismissed, the district court “had only the first amended complaint before it.” The providers also did not dispute that “the first amended complaint is the ‘operative’ complaint.” As a result, the court concluded that it would “disregard the new material in the proposed second amended complaint because it is not part of the appellate record.”
Turning to the merits, the Sixth Circuit concluded that its hands, like the district court’s, were tied by its prior decision in Cromwell: “Cromwell considered materially identical state-law claims to those we now confront: There, healthcare providers asserted negligent-misrepresentation and promissory-estoppel claims against an ERISA-plan administrator based on the administrator’s false assurances of coverage… We held that ERISA expressly preempted the providers’ state-law claims because they ‘relate[d] to’ an ERISA-governed plan… The same conclusion follows here.”
Cromwell “explained that the claims effectively sought ‘the recovery of benefits from the [ERISA] plan for health care services rendered[.]’” As a result, the claims were “‘at the very heart of issues within the scope of ERISA’s exclusive regulation’ and were ‘[c]learly’ preempted.”
Indeed, the Sixth Circuit found that this case was even easier than Cromwell because in Cromwell the underlying patient was not actually a plan participant at the relevant time; his coverage had lapsed. Here, by contrast, coverage clearly existed, which meant ERISA’s preemptive force was even stronger.
The providers made four efforts to sidestep Cromwell, but none succeeded. First, the providers attempted to cabin Cromwell to claims involving an assignment-of-benefits agreement. The providers argued that the plaintiff in Cromwell had an assignment from its patient, and thus could have proceeded with ERISA claims pursuant to that assignment. Here, however, the providers had no such assignment. However, the Sixth Circuit found that this interpretation “overreads the relevance of the parties’ assignment agreement to Cromwell’s preemption analysis.” The court stated that Cromwell’s discussion of the state law claims at issue did not turn on the assignment agreement, which was only mentioned “in a passing reference in a footnote.”
Second, the providers tried to draw a line between “right to payment” claims, which relied on plan terms and were thus preempted, and “extent of payment” claims, which they alleged arose from a separate rate agreement and thus were not preempted. The court rejected this distinction “from both directions.” The court stated that Cromwell was not a “right to payment” case, and in any event, the providers’ claims in this case were not pure “extent of payment claims” because they relied in part on the plan’s UCR-based reimbursement terms, not a separate side agreement on rates. As a result, “the alleged ‘misrepresentations’ and ‘promises’ related to the contents of the plan’s terms.”
Third, the providers argued that intervening Supreme Court decisions had undermined Cromwell. The Sixth Circuit quickly dispensed with this argument, noting that it was bound by Cromwell and that the providers’ discussion was “at a high level of generality,” and not nearly specific enough to “constitute the type of ‘legal reasoning’ that would allow us to disregard Cromwell.” The court added that Cromwell’s rationale was consistent with, not undercut by, several of the providers’ cited cases.
Fourth, the providers cited out-of-circuit decisions that declined to preempt similar claims or criticized Cromwell. The court did not substantively engage with these decisions, and instead hand-waved them away as involving unspecified “factual or legal distinctions.” The court reiterated that “we may not cast aside Cromwell’s controlling reasoning.”
As a result, because Cromwell squarely dictated the result, the court affirmed the district court’s dismissal on preemption grounds. Finally, the court addressed one remaining item: the district court’s effective denial in its dismissal order of the providers’ request for leave to amend. The Sixth Circuit concluded that the district court did not abuse its discretion in this regard because the providers only requested such leave “in a single sentence at the conclusion of their brief.” Such a request, “without any indication of the particular grounds on which amendment is sought,” was insufficient.
If this case was so straightforward, why was it published? The answer can be found in Judge Eric E. Murphy’s concurrence, in which he agreed the panel was bound by Cromwell, but expressed his uneasiness at the outcome.
Judge Murphy listed a series of hypotheticals involving increasingly tangential relationships to benefit plans to illustrate that reading ERISA’s “relate to” language as broadly as Cromwell could lead to unpleasant results. A broad reading could effectively insulate plan administrators from ordinary, generally applicable tort and contract duties owed to third parties who are not plan participants, beneficiaries, or fiduciaries and who therefore have no ERISA cause of action to fall back on. “The result? No enforceable legal duties – neither federal nor state – would apply… By passing ERISA, did Congress want to test whether Thomas Hobbes or John Locke was right about human conduct in the state of nature?”
Judge Murphy contended that case law supported a narrower interpretation. He cited the Supreme Court’s 1988 decision in Mackey v. Lanier Collection Agency & Service, Inc., which found “run-of-the-mill state-law claims” against administrators were not preempted, and also cited the Sixth Circuit’s own Penny/Ohlmann/Nieman, Inc. v. Miami Valley Pension Corp., which allowed contract and tort claims against non-fiduciary service providers to proceed.
Judge Murphy also cited the Third Circuit’s description of Cromwell as a “poorly reasoned” “outlier” in Plastic Surgery Center, P.A. v. Aetna Life Ins. Co., as well as decisions from the Fifth, Eighth, and Eleventh Circuits (plus Healthcare Ally), all of which permitted similar negligent misrepresentation claims to survive preemption.
Judge Murphy concluded that while Cromwell correctly preempted claims tied to an actual assignment-of-benefits agreement, its blanket treatment of the negligent misrepresentation and promissory estoppel counts “sits uncomfortably” next to competing authority. As a result, while he was forced to concur in the panel opinion, “Going forward…I would interpret Cromwell as narrowly as its logic would allow.”
This concurrence seems to be an invitation to the providers to seek en banc rehearing from the Sixth Circuit, or perhaps go even further up the chain. If that happens, we’ll let you know. In the meantime, the circuit split on this issue continues.
Below is a summary of this past week’s notable ERISA decisions by subject matter and jurisdiction.
Attorneys’ Fees
Ninth Circuit
Woo v. Kaiser Foundation Health Plan Inc., No. 23-cv-05063-RFL, 2026 WL 2445072 (N.D. Cal. Aug. 19, 2026) (Judge Rita F. Lin). Sarah Woo prevailed on an equitable estoppel claim against Kaiser Foundation Health Plan and related defendants after the court found, following a bench trial, that defendants misrepresented to Woo that she was eligible to participate in a retirement plan. The parties could not agree on the appropriate remedy, and thus the court ordered briefing, after which it adopted Kaiser’s proposed form of judgment awarding Woo a lump sum payment rather than her preferred ongoing-participation remedy. (We covered these two rulings in our February 4, 2026 and April 22, 2026 editions.) Woo has now moved under Federal Rule of Civil Procedure 59(e) to alter the judgment, and also separately moved for $258,000 in attorneys’ fees and costs under 29 U.S.C. § 1132(g)(1). Tackling the Rule 59 motion first, the court denied it, finding no “newly discovered evidence,” no “clear error or…manifest[] unjust[ice],” and no “intervening change in controlling law.” Woo’s argument that the court had found her to be a plan participant entitled to ongoing eligibility was once again rejected, and her new arguments about the tax and ERISA compliance implications of the judgment should have been raised earlier. The court emphasized that its prior order “did not purport to find…that Woo was, in fact, a [plan] participant” or “entitled to ongoing Plan participation[.]” The court also rejected a surcharge theory, noting equitable estoppel merely “holds the fiduciary ‘to what it has promised,’” and no breach of fiduciary duty or unjust enrichment had been found. Turning to fees, the court found Woo, having secured a judgment, was entitled to a discretionary fee award under § 1132(g)(1), which Kaiser did not dispute. However, the court substantially trimmed her requested amount. On hourly rates, the court rejected the requested $800 rate for lead counsel Jay Suen, whose practice “focuses on trusts and estates and taxation” rather than ERISA. The court found that Woo’s supporting declaration from an ERISA specialist only supported a rate appropriate for “an ERISA practitioner with the same experience, skill and reputation.” The court thus used the $575 hourly rate Suen actually charged at the time his services were rendered rather than his requested $800 or his current $620 rate. The court applied a similar $100-per-hour reduction to the other more junior timekeepers on the case. On hours, the court excluded time spent on an amended complaint that was never filed, and further applied Kaiser’s proposed 40% reduction to the time spent on the form-of-judgment proceedings. The court explained that “the most critical factor” in a fee award “is the degree of success obtained,” and Woo had only partially succeeded because the court adopted Kaiser’s proposed judgment over her own. The court declined, however, to impose any reduction for block billing, finding that the challenged entries “reflect a reasonable number of hours for the group of tasks listed.” The court also deleted time spent on the Rule 59 motion, as well as $12,370.50 in consulting and actuarial valuation expenses incurred in supporting that motion. Applying these reductions, the court awarded Woo $183,275 in fees and $467 in costs for work through April 3, 2026, and an additional $17,920 for the supplemental period, for a total fee award of $201,195, along with $467 in costs.
Breach of Fiduciary Duty
Fourth Circuit
McNeil v. Marriott Int’l, Inc., No. 25-2975-TDC, 2026 WL 2406176 (D. Md. Aug. 18, 2026) (Judge Theodore D. Chuang). William McNeil is a Marriott employee who uses tobacco. He brought this putative class action against Marriott and its benefits department regarding the tobacco surcharge imposed under Marriott’s self-funded ERISA-governed health benefit plan. The plan requires tobacco-using participants to pay $15 per week (roughly $780 annually) in addition to their regular premiums, although it offers a free “wellness program” that participants can complete to avoid the surcharge. McNeil contends that the program violates ERISA because it stops charging the surcharge only upon completion of the cessation program, without retroactively reimbursing surcharges paid earlier in the plan year. He also contends that defendants failed to adequately notify participants of the alternative standard for complying with the plan, and that defendants breached their fiduciary duties by using surcharge funds to offset Marriott’s contributions to the plan. His operative complaint asserts four counts: (1) unlawful surcharge based on failure to provide the “full reward” required by 42 U.S.C. § 300gg-4(j)(3)(D); (2) unlawful surcharge based on inadequate notice under § 300gg-4(j)(3)(E); (3) breach of fiduciary duty and prohibited transactions under 29 U.S.C. §§ 1104, 1106, and 1109; and (4) the same theories asserted on behalf of individual participants under § 1132(a)(3). Defendants moved to dismiss, asserting arguments on standing, the merits, and appropriate remedies. On Article III standing, the court held that McNeil’s payment of the surcharge was a concrete injury traceable to the alleged wellness program defects. McNeil also had standing regarding his inadequate notice claim, regardless of whether he personally attempted the cessation program or read the disclosure materials. The court also rejected defendants’ “statutory standing” argument that only participants for whom quitting was “unreasonably difficult” or “medically inadvisable” could sue, explaining that the statute’s protections extended broadly to “any individual” paying the surcharge. The court thus turned to the merits, and on Count 1, it agreed with McNeil that the “full reward” requirement means a wellness program must make available the entire annual surcharge amount, not merely a prospective discount: “The Court finds that the ordinary meaning of the term ‘full reward,’ as used in 42 U.S.C. § 300gg-4(j)(1)(C) and its implementing regulations, is the full amount of an annual surcharge for a health factor.” The court thus denied the dismissal of Count 1. However, on Count 2, the court found that Marriott’s enrollment guide used language “almost verbatim” to the regulations’ model notice, and thus adequately disclosed the alternative standard and contact information. Count 2 was dismissed. On the fiduciary duty counts, the court rejected defendants’ argument that they were not fiduciaries because they were acting in a “settlor” capacity in designing the plan. The court found that Marriott and its benefits department both acted as fiduciaries. Marriott was a fiduciary because it was “entrusted with employee funds for remittance” to the plan, and the benefits department was a fiduciary because it was the named plan administrator. The court also held that the withheld surcharges became plan assets, and that McNeil plausibly alleged a breach of the duty of loyalty by alleging that defendants used these assets “to displace Marriott’s own contributions,” and further profited by retaining and earning interest on them. The court found no merit in McNeil’s prohibited transaction claims, however, ruling that Marriott’s alleged conduct did not constitute a “transaction” in the “commercial bargain” sense contemplated by the statute. Next, the court addressed whether McNeil could obtain plan-wide relief under 29 U.S.C. § 1132(a)(2) for a fiduciary duty breach under Count 3. The court concluded he could not because he had not alleged any loss to the plan itself: “McNeil does not claim that Defendants failed to remit participants’ tobacco surcharges to the Plan, that Defendants reduced their contributions to the Plan such that the Plan had less money than it would have had with lawful tobacco surcharges, or that the Plan could not pay out benefits to which participants are entitled.” Thus, Count 3 was dismissed. However, Count 4 (for individual relief) survived because McNeil’s equitable claims for injunctive relief and for restitution of specifically traceable, unjustly retained funds remained viable under § 1132(a)(3). As a result, defendants’ motion to dismiss was “granted as to Counts 2 and 3, granted as to the prohibited transaction claims in Count 4, and otherwise denied.”
Sixth Circuit
Fritsch v. Cracker Barrel Old Country Store, Inc., No. 3:25-cv-01249, 2026 WL 2425877 (M.D. Tenn. Aug. 19, 2026) (Chief Judge William L. Campbell, Jr.). Charles Fritsch, an employee at an Ohio Cracker Barrel restaurant, was a participant in Cracker Barrel’s ERISA-governed employee health plan. He was required to pay a tobacco surcharge to maintain health insurance coverage under the plan, which he challenges in this putative class action. Fritsch alleges that Cracker Barrel’s tobacco wellness program violated ERISA because it failed to provide a reasonable alternative standard to the surcharge and failed to give notice of the availability of any such alternative standard. Fritsch’s amended complaint asserted six counts: two contending that the wellness program violated ERISA (Counts I and II), two alleging breach of fiduciary duty under 29 U.S.C. § 1132(a)(2)/§ 1109 (Counts III and IV), and two alleging violations of the plan’s own terms, including a benefits claim (Count VI) and a related claim pleaded in the alternative (Count V). Cracker Barrel moved to dismiss under both Rule 12(b)(1) and Rule 12(b)(6). The court denied the motion to dismiss in full. On standing, the court held that Cracker Barrel’s argument that Fritsch “had access to a reasonable alternative standard at initial enrollment…and received notice that he could obtain this reward,” went to the merits, not jurisdiction. “When considering a plaintiff’s standing arguments, courts assume that the plaintiff’s theory of the merits of the argument is correct.” The court further found Cracker Barrel’s “single sentence challenge to Plaintiff’s standing for injunctive relief” was unpersuasive because it lacked supporting authority. On the merits of Counts I and II, the court had its own single-sentence response in which it “decline[d] to make such a determination as a matter of law at this initial stage of litigation.” On the fiduciary-duty claims, the court rejected Cracker Barrel’s argument, based on the Sixth Circuit’s 2022 decision in Hawkins v. Cintas Corp., that Fritsch failed to plausibly allege loss to the plan as a whole, explaining that the Sixth Circuit had “already considered and rejected this argument” in its 1995 decision in Kuper v. Iovenko: “Defendants’ argument that a breach must harm the entire plan to give rise to liability under [§ 1109] would insulate fiduciaries who breach their duty so long as the breach does not harm all of a plan’s participants. Such a result clearly would contravene ERISA’s imposition of a fiduciary duty.” The court also noted that Hawkins involved a motion to compel arbitration, not a motion to dismiss. As for Cracker Barrel’s argument that its wellness program was a matter of plan design and not fiduciary discretion, the court found that Cracker Barrel’s reply was “not responsive” to the arguments made by Fritsch in his opposition. The court declined to “resolve factual disputes in Cracker Barrel’s favor” at the pleading stage. On the plan-violation claims, the court rejected Cracker Barrel’s exhaustion argument because Cracker Barrel did not explain why plaintiffs’ futility allegations were conclusory. It also rejected the argument that Count V was impermissibly duplicative of Count VI, stating that alternative pleading was permissible. Finally, on the statute of limitations, the court explained that this was an affirmative defense that Fritsch was not required to plead around, and dismissal on limitations grounds is proper only where “the face of the complaint shows that a claim is time-barred.” Cracker Barrel did not seek outright dismissal based on this defense, merely to narrow the temporal scope of certain claims, but the court would still not go along. The motion to dismiss was thus denied in its entirety.
Seventh Circuit
Farrar v. Arthur J. Gallagher (Illinois), LLC, No. 25 C 13005, 2026 WL 2415672 (N.D. Ill. Aug. 17, 2026) (Judge Sara L. Ellis). Lolitha Farrar and Nakia Woodard brought this putative class action on behalf of participants in the Arthur J. Gallagher & Co. Employees’ 401(k) Savings and Thrift Plan. One of the investment options in the plan, the MassMutual Guaranteed Interest Fund (GIF), was a “general account” guaranteed investment contract (GIC) that held plan assets unrestricted in MassMutual’s general account. Plaintiffs characterized this as the riskiest type of GIC (as opposed to less risky “synthetic” or “separate account” GICs) because general account GICs are “vulnerable to a single entity credit risk.” Plaintiffs, who invested in the MassMutual GIF, alleged they suffered “devastating losses” from the fund’s underperformance while MassMutual “reaped a windfall” by retaining returns above the crediting rates paid to investors. Plaintiffs identified nineteen allegedly comparable GICs that outperformed the MassMutual GIF at various points between 2019 and 2024. Plaintiffs asserted three ERISA claims against Gallagher, the plan’s benefits committee, and committee members: (1) breach of the fiduciary duty of prudence, (2) failure to monitor other fiduciaries, and (3) prohibited transactions under 29 U.S.C. § 1106(a)(1). Defendants moved to dismiss all three counts for failure to state a claim. On the prudence claim, the court stated that “the prudence standard is process-based, not outcome-based.” As a result, “a Plan’s mere underperformance is not actionable so long as the fund administrators acted prudently.” The court recognized that a plan’s process could be called into doubt “by identifying other similar investment funds with significantly better rates of returns and less expense.” However, a plaintiff “must identify other funds that provide a sound basis for comparison and constitute ‘a meaningful benchmark,’” and “must show – at minimum – that there were year-in, year-out better-performing alternatives that cast doubt on the Investment Committee’s process.” According to the court, plaintiffs failed this test. The court assumed for the purposes of the motion that plaintiffs’ comparator GICs were similar, but, “even assuming that…Plaintiffs do not allege that each of these comparators consistently overperformed the MassMutual GIF throughout the class period.” Of the nineteen comparators, only one outperformed the MassMutual GIF throughout the entire class period, while plaintiffs supplied just one or two years of data for the remaining sixteen. “Citing to a rotating cast of funds with higher crediting rates in different years,” the court explained, “is blatant cherry-picking and cannot support a claim of imprudence,” and a single consistent comparator “does not support an inference of imprudence” standing alone. The court also noted that plaintiffs had failed to respond to this argument in their opposition brief. Count I was thus dismissed. Count II (failure to monitor) fell with it because it was derivative of Count I. As for Count III (prohibited transactions), the court accepted that MassMutual qualified as a “party in interest” because of its recordkeeping services for the plan, but found the underlying allegations “far from clear.” Plaintiffs vaguely alleged prohibited “annuity transactions” occurring “each time the Plan paid fees to MassMutual/Empower in connection with the Plan’s investments in the MassMutual GIF,” but the complaint “includes no factual allegations regarding the nature of these alleged fees, revenue sharing agreements, or other supposed transactions.” Without such details, plaintiffs’ allegations did not rise “above the speculative level.” The court declined to consider new theories plaintiffs raised in their opposition brief because “the complaint may not be amended by the briefs in opposition to a motion to dismiss.” As a result, Count III was also dismissed. Thus, the court granted defendants’ motion in full, but gave plaintiffs leave to amend.
Kring v. Jeld-Wen Holding, Inc., No. 25-cv-07068, 2026 WL 2454345 (N.D. Ill. Aug. 21, 2026) (Judge Mary M. Rowland). Kenneth and Elizabeth Kring, former participants in the Jeld-Wen 401(k) Retirement Savings Plan, brought this putative class action against Jeld-Wen, the company’s benefits committee, and Gallagher Fiduciary Advisors, an outside investment manager. Plaintiffs alleged that three investment options – a series of T. Rowe Price target date funds, the Loomis Fund, and the TCW Fund – underperformed peers and incurred unreasonably high fees. Plaintiffs asserted seven counts: breach of the duty of prudence, breach of the duty of loyalty, co-fiduciary liability, failure to monitor, two varieties of prohibited transactions under ERISA § 406(a) and (b), and failure to follow the plan’s investment policy statement (IPS). Both the Jeld-Wen defendants and Gallagher moved to dismiss. The court first held plaintiffs had Article III standing to challenge funds beyond the single one in which they were personally invested, following the Seventh Circuit’s holding in Albert v. Oshkosh Corp. (covered in our September 7, 2022 edition). However, as former participants with no allegation of likely reemployment, they lacked standing to pursue prospective injunctive relief. The court also declined to dismiss the complaint outright for improper “shotgun” pleading (although it admitted the complaint was “confusing” and drafted in an “unproductive” fashion). Thus, the court turned to the merits. On the threshold fiduciary-status question, the court held that because the complaint alleged Gallagher had “full discretionary authority” and “assume[d] legal responsibility and fiduciary liability for the investment decisions” from 2015 onward, the Jeld-Wen defendants could not be liable for fiduciary breaches tied to investment decisions during that period. Counts I and II against the Jeld-Wen defendants were thus dismissed. Turning to the duty of prudence (Count I), the court found each of plaintiffs’ four theories deficient. The underperformance and fee allegations failed for lack of a “meaningful benchmark.” Plaintiffs compared the TCW Fund to “unspecified ‘peer’ funds” without “indicating why such…funds are suitable benchmarks.” A bare Morningstar rating with “no facts as to what Morningstar’s analysis entailed or when the Morningstar rating was made” was insufficient. The Loomis Fund’s proposed benchmark, the 450-stock Russell 1000 Growth Index, could not meaningfully compare to a “highly and unusually concentrated” actively managed fund holding only a few dozen stocks. Plaintiffs did not even address the T. Rowe Price TDFs in their briefing. Moving on to plaintiffs’ share-class theory (which alleged that defendants should have invested in lower-cost institutional share classes), the court rejected it because plaintiffs neither alleged the minimum investment thresholds for cheaper institutional shares nor tied the plan’s size to the kind of “massive bargaining power” that lets “jumbo” plans negotiate waivers of such thresholds. The court also was unimpressed by plaintiffs’ theory that the plan did not follow the IPS. The IPS was explicitly non-mandatory and instead “takes a holistic approach,” listing “non-exhaustive” factors with “no single factor determinative.” The duty of loyalty claim (Count II) against Gallagher failed because plaintiffs’ allegations “merely repackage[d]” their imprudence theory without any inference of self-dealing. A vaguely pled “kickback” scheme was both insufficiently alleged and, in any event, would implicate Jeld-Wen rather than Gallagher. The co-fiduciary claim (Count III) failed for lack of any allegation that Gallagher had actual knowledge of a Jeld-Wen breach. Furthermore, as already held, no breach could exist because Jeld-Wen did not have fiduciary control over investments. The Jeld-Wen defendants also escaped co-fiduciary liability because nothing alleged they “knowingly participated in” or concealed any Gallagher breach. The failure-to-monitor claim (Count IV) collapsed because it addressed only Jeld-Wen’s alleged failure to monitor the committee, not Gallagher, which was the entity that controlled investment decisions. On plaintiffs’ § 406(a) prohibited-transaction claim (Count V), the court allowed one theory to survive: plaintiffs’ allegation that the committee paid unreasonably high fees to Gallagher, a party in interest, from plan assets. The court rejected defendants’ standing argument on this claim, finding that the imposition of such fees plausibly injured all participants in the plan. However, the court dismissed the theory that inclusion and retention of the challenged funds itself violated § 406(a), holding that “a decision to continue certain investments…cannot constitute a ‘transaction.’” Furthermore, claims based on the 2007 addition of the T. Rowe Price and TCW funds were barred by ERISA’s six-year statute of repose, while the 2020 addition of the Loomis Fund could not be attributed to the committee because Gallagher was managing investments by that point. The parallel theory that the committee separately paid fees to the funds’ managers also failed for the same reason. The § 406(b) self-dealing claim (Count VI) failed entirely, for similar statute-of-repose and causation reasons, plus the unsupported “kickback” theory. Finally, the IPS-violation claim (Count VII) failed because, as plaintiffs conceded, the specific provisions they cited did not actually appear in the IPS. As a result, defendants’ motions were mostly granted. Gallagher was dismissed entirely, and the Jeld-Wen defendants were dismissed as to all claims except the § 406(a) claim against the Committee for fees paid to Gallagher. Plaintiffs were given leave to amend.
Tenth Circuit
Brewer v. Alliance Coal, LLC, No. 24-CV-0406-CVE-SH, 2026 WL 2445492 (N.D. Okla. Aug. 20, 2026) (Judge Claire V. Eagan). Joseph Brewer, Joshua Chuck, and Jason Moody are participants in Alliance Coal’s defined contribution retirement plan. They allege that Alliance, its board of directors, and its administrative committee breached their duty of prudence under ERISA by failing to monitor and control excessive recordkeeping and administrative (RKA) fees charged by the plan’s recordkeeper, Intrust Bank. Plaintiffs alleged that between 2018 and 2024 the plan’s RKA fees were more than three times higher than one of the plan’s prior recordkeepers, and far above the average of thirty-two comparator plans of similar size. Plaintiffs have already had one shot at pleading their claims. Last year the court dismissed their first amended complaint’s fiduciary duty claims because, while plaintiffs adequately alleged similarly sized comparator plans paid lower RKA fees, they failed to allege the comparators “actually did provide the same services” as Intrust, which meant that they did not properly allege a “meaningful benchmark” as required by the Tenth Circuit in Matney v. Barrick Gold of North America. (We covered the court’s prior decision in our December 17, 2025 edition, and we covered Matney in our September 13, 2023 edition.) Plaintiffs’ operative second amended complaint has added Form 5500 Schedule C service codes for each comparator plan and new allegations about the prior recordkeeper’s comparable fees and services. Defendants moved to dismiss again, and this time they were unsuccessful. On the meaningful benchmark question, the court found that plaintiffs had cured their earlier defect. Rather than merely asserting that comparators “could” provide the same services, the amended complaint’s new coding allegations overlapped with Intrust’s own codes. The court rejected defendants’ argument that every code must match exactly, holding that “none of the authorities cited supports defendants’ proposition” that codes must be identical. “Rather, they all support the claim that the services rendered…must be identical, not that every code must be.” The court relied on the Third Circuit’s 2024 decision in Mator v. Wesco Distribution, Inc. (the case of the week in our May 22, 2024 edition), which also accepted overlapping recordkeeping codes as sufficient. The court also rejected defendants’ argument that the comparator plans were skewed by indirect compensation not reflected in Intrust’s direct-fee-only arrangement, finding plaintiffs had “plausibly alleged and sufficiently argued” that comparator plans reporting indirect compensation had actually reported $0 in such fees, which meant only “apples-to-apples” direct fees were being compared. The court left any dispute about the accuracy of that reporting to be resolved during discovery. The court also rejected defendants’ “cherry-picking” argument that plaintiffs used different sets of five comparator plans in different years rather than a single consistent panel. Plaintiffs measured the plan’s fees against five peer plans’ fees “during the same year for each year of the purported class period,” a methodology the court found not “inherently flawed.” As for the calculation of the RKA fees themselves, the court declined to credit fee agreements introduced by defendants which they claimed showed much lower fees than that alleged by plaintiffs, ruling that they could not be considered at the pleading stage. The court likewise treated as factual disputes for discovery, rather than pleading defects, defendants’ arguments that plaintiffs’ Form 5500-based calculations improperly conflated trustee and RKA fees and ignored the plan’s use of forfeitures to offset participant-charged fees. As a result, the court concluded that plaintiffs had met their burden with their new complaint, denied defendants’ motion to dismiss, and ordered defendants to file an answer.
Harrison v. Envision Mgmt. Holding, Inc. Board of Directors, No. 1:21-cv-00304-CNS-MDB, 2026 WL 2444554 (D. Colo. Aug. 20, 2026) (Judge Charlotte N. Sweeney). Robert Harrison and Grace Heath, participants in the Envision Management Holding, Inc. Employee Stock Ownership Plan, brought this putative class action challenging the ESOP’s 2018 purchase of Envision stock from the company’s sellers, alleging the transaction was a prohibited transaction under ERISA that overpaid for the stock while entrenching insider control. Defendants included Envision’s Board of Directors, the ESOP Committee, ESOP trustee Argent Trust Company, and various individuals. Plaintiffs asserted, among other claims, a prohibited transaction claim under 29 U.S.C. § 1106(a) against the Board Defendants (Count I), a related claim under § 1106(b)’s self-dealing prohibition (Count III), and a “knowing participation” claim against non-fiduciary Nicole Jones (Count II). This case has already been up to the Tenth Circuit, which ruled in 2023 that, because of the effective vindication doctrine, plaintiffs were not required to arbitrate their claims brought on behalf of the plan. (That decision was Your ERISA Watch’s case of the week in our February 15, 2023 edition.) Now the Envision defendants have moved for partial summary judgment on three fronts: (1) the Board Defendants were not functional fiduciaries who “caused” the ESOP transaction for purposes of Count I, assigning responsibility to Argent for any such decision, (2) Section 406(b) reaches only fiduciaries who exercised discretionary authority, and (3) Jones lacked the actual or constructive knowledge required to sustain a knowing-participation claim. The court denied the motion in full, finding genuine disputes of material fact throughout. The court ruled that a reasonable factfinder could conclude that all of the board members at issue exercised discretionary control over the transaction. The court noted that the ESOP plan itself identified the board as “Named Fiduciaries,” which created a triable question as to whether the board defendants had “a duty to monitor Argent’s actions,” since “[f]iduciaries who may appoint other fiduciaries cannot simply name those fiduciaries and then turn a blind eye to the performance of their appointees.” The court credited plaintiffs’ evidence that the board defendants “manipulated the trustee selection process to steer the trustee appointment toward Argent,” “conditioned” the transaction on retaining control, and withheld or misrepresented material information such as prior company valuations. On Count III, the court found the parties’ dispute was “almost entirely causal in nature” and that its causation ruling on Count I resolved the Section 406(b) challenge in Count III. (The issue of whether defendants “received any consideration for [their] own personal account in connection with a plan transaction” did not appear to be in dispute.) Finally, regarding Jones, the court held that “[n]on-fiduciaries may be liable under ERISA if they possess knowledge of ‘the circumstances that rendered the transaction unlawful,’” and found sufficient evidence that Jones knew Argent served as ESOP trustee, caused the ESOP’s stock purchase, and signed the purchase agreement on the ESOP’s behalf, creating a triable issue on her knowledge of the alleged violations. In the end, the court “agrees with Plaintiffs that their ‘fact-intensive ERISA claims are not suitable for summary judgment,’” and thus this case will proceed to trial.
Eleventh Circuit
Aleman v. David Green, D.D.S., P.A., No. 25-80713-CIV-CANNON, __ F. Supp. 3d __, 2026 WL 2432746 (S.D. Fla. Aug. 18, 2026) (Judge Aileen M. Cannon). Zoraida Aleman has brought this putative class action against a dental practice, David Green, D.D.S., P.A., Dr. Green himself, and his wife. She alleges that defendnats engaged in various misconduct regarding the dental practice’s profit sharing plan, including concealing its existence from participants such as herself, withholding benefit statements and required disclosures, causing the plan to purchase and maintain a whole-life insurance policy on Green’s life and then selling that policy to Green personally for less than fair value, and mishandling the plan’s eventual termination. The operative second amended complaint contains ten counts, including failure to furnish benefit statements and disclosures (Counts I-II), fiduciary breach through nondisclosure (Count III), fiduciary breach in managing plan assets via the insurance policy (Count IV), prohibited transaction and self-dealing claims tied to the policy sale (Counts V-VI), fiduciary breach in implementing the plan termination (Count VIII), and co-fiduciary liability (Count IX). The dental practice moved to dismiss Counts VIII and IX, while Green moved to dismiss Counts I through VI, VIII, and IX. The court denied both motions in full. On Counts I and II, Green argued that ERISA’s statutory disclosure penalties run only against the plan’s designated administrator, which was the dental practice, not him. The court agreed with that legal premise but found Aleman plausibly alleged Green was a de facto administrator because he controlled the practice, personally signed key plan documents, issued appeal decisions, and directed the insurance sale and asset liquidation. On Count III, the court held Aleman could not simply relabel a document-disclosure claim as a fiduciary breach claim, but found that her narrower theory regarding Green’s concealment of the plan stated an independent fiduciary injury. “The failure to disclose an ERISA covered plan is generally recognized as a breach of fiduciary duty.” The court also allowed Aleman’s request for an accounting because it sought equitable relief tied to the concealment and was not simply a disguised claim for monetary damages. The court also concluded that Aleman’s allegations of lost “knowledge and opportunity to act” were enough to plead that plaintiffs had suffered harm from defendants’ actions. Count IV, regarding the life insurance policy, survived because the policy was plausibly plan property. The court rejected Green’s argument that the policy constituted “incidental benefit insurance,” exempt from fiduciary scrutiny, noting that the “duty of prudence trumps the instructions of a plan document.” The court also found Aleman adequately alleged loss from a below-value sale that a prudent valuation process would have avoided. On the prohibited transaction claims, Green argued for the application of a regulatory exemption allowing the sale of insurance to plan participants (PTE 92-6). However, the court found that this was an affirmative defense Aleman did not need to plead around, and the materials defendants submitted in support of their argument, even if considered, did not adequately prove their defense. The court further noted the exemption did not apply to Count VI’s separate personal-consideration theory under § 406(b)(3). On Count VIII, the court found that Aleman stated a viable claim that the plan’s wind-up was implemented improperly, independent of any IRS guidance, because the plan’s own termination provision required distribution “as soon as reasonable.” Aleman alleged that distributions proceeded in “piecemeal rounds,” used outdated account values, and reached allegedly ineligible recipients. The court also found that Aleman had adequately pleaded harm because “a loss to an individual account is a loss to the Plan,” and the alleged mishandling was a plan-level injury independent of what any individual participant would have elected. Because Count IX’s co-fiduciary claim was derivative of Count VIII, it survived as well. As a result, defendants’ motions were entirely unsuccessful and the case will continue.
Class Actions
First Circuit
Adams v. Dartmouth-Hitchcock Clinic, No. 22-cv-099-LM, 2026 WL 2475287 (D.N.H. Aug. 24, 2026) (Judge Landya McCafferty). Debra Adams, Danillie Mars, and Michelle Miller brought this class action against Dartmouth-Hitchcock Clinic, its board of trustees, and the Clinic’s investment committee, alleging that defendants breached their ERISA fiduciary duties to prudently manage and monitor the Clinic’s employee retirement plans. The parties reached a settlement in October 2024 after discovery, and in March of this year the court granted preliminary approval of an $850,000 settlement fund. (Your ERISA Watch covered this decision in our April 1, 2026 edition.) After notice was issued to more than 37,000 class members, the court held a fairness hearing on plaintiffs’ motion for final approval and a separate motion seeking $283,333.33 in attorney fees (33% of the fund), $85,840.36 in litigation expenses, and $10,000 case contribution awards for each of the three named plaintiffs. In this order, the court granted final approval on the class certification and notice requirements, finding proper notice under Rule 23 and due process, no objections from any class member, and full compliance with the Class Action Fairness Act. On the fairness of the settlement itself, however, the court repeated a concern from the motion for preliminary approval, which was discussed at the hearing. The concern was that the $850,000 settlement was a far cry from the initial damages estimate of $10 million, resulting in a payout to class members of barely ten dollars on average. Class counsel explained that discovery had undercut their investment-imprudence theory because defendants had a “colorable argument” that they maintained a genuine process for reviewing the plans’ investments, and thus counsel had pivoted to the recordkeeping-fee theory alone. This claim was worth far less; their expert estimated damages at roughly $4.2 million against a greater-than-fifty-percent chance of recovering nothing at trial. Crediting that risk assessment, and finding the settlement negotiated at arm’s length, adequately informed, and within the range of comparable settlements, the court approved the settlement agreement and plan of allocation. Turning to fees, the court applied the percentage-of-fund method, “the prevailing praxis” in the First Circuit, weighing seven factors to assess reasonableness in common-fund cases. The court found several factors favorable to class counsel. There were no objections, counsel was skilled in a complex practice area, and there was a genuine contingency risk. Counsel stated that they had spent more than 1,900 hours on the case, resulting in a $1.2 million lodestar. This meant that the requested fees only amounted to 23% of the lodestar. However, the court found that the requested 33% fee was excessive given the case’s posture. Settlement was reached “before full discovery was completed” and before summary judgment, after only a successful motion to dismiss, meaning “little in the way of adversarial litigation” had actually occurred despite the case’s nearly four-year pendency. The court emphasized that the modest recovery also cut against a higher award. Furthermore, class counsel’s cited 33% precedents largely came from outside the circuit or reflected minimal judicial analysis, including some “pre-written proposed orders that judges have simply endorsed with a signature.” In the end, “while the court appreciates Class Counsel’s work on this matter and the results they were able to achieve for the Class Members, the court is not convinced that the circumstances warrant the 33% award sought.” The court set the fee at 25% instead, or $212,500, $70,833.33 less than requested. The court approved the requests for litigation expenses and case contribution awards, however, and with that, closed the case.
Disability Benefit Claims
First Circuit
Shortill v. Reliance Standard Life Ins. Co., No. 2:25-cv-00264-JAW-JCN, 2026 WL 2455280 (D. Me. Aug. 21, 2026) (Judge John A. Woodcock, Jr.). Susan Shortill sued Reliance Standard Life Insurance Company to recover long-term disability benefits under an ERISA-governed plan sponsored by her former employer, TRISTAR Service Company. The parties filed cross-motions for judgment on the administrative record. In April of this year a magistrate judge recommended granting Reliance Standard’s motion and denying Shortill’s, finding the termination decision supported by substantial evidence and therefore not arbitrary and capricious. (We covered the magistrate’s report in our May 6, 2026 edition.) Shortill objected on three grounds, and the district court judge evaluated her objections in this order. Shortill’s first objection was that Reliance failed to adequately assess her mental health condition and thus denied her ERISA’s required “full and fair review,” arguing that records from the relevant period documented “the rapid decline of Plaintiff’s mental health” contributing to her fatigue. The court rejected this objection, agreeing with the magistrate judge that Shortill “did not include her mental health condition among the bases for her disability” during the administrative process and had not “offer[ed] any evidence that she pursued treatment for depression with a therapist or other mental health provider during the relevant period.” The court found that Shortill could not now raise an issue never presented at the pre-appeal or appeal levels. Shortill’s second objection accused Reliance of impermissibly “cherry-picking” records regarding her neck injury, arguing that her cervical symptoms which led to her 2024 surgery had existed continuously since a fall in 2023 and that the surgery merely reflected the failure of earlier conservative treatment. The court sided with Reliance, however, pointing to a June 2024 treatment note describing Shortill as presenting with “1 month history of neck pain” that “began suddenly last month,” and a “new complaint of neck pain and bilateral UE radicular symptoms.” This could “only mean that her neck symptoms which eventually led to surgery were not present when benefits ended on April 19, 2024.” The court also noted an April 2024 note showing only shoulder pain and physical therapy “going well” with pain at a 2/10. The court further observed that Shortill had “returned to work full-time on March 14, 2024,” which it found refuted her claim of continuous total disability through the relevant period. Shortill’s third objection challenged the magistrate’s reliance on a vocational assessment that she argued had “all but confirmed” she could not perform her prior occupation as a claims supervisor, given her inability to push or pull with her dominant right arm. The court rejected this as well, explaining that Reliance had properly evaluated Shortill’s “regular occupation” by how it was performed in the national economy, which does not typically require pushing or pulling. In any event, one of Shortill’s physicians had opined that Shortill’s “left upper extremity was fully functional.” The court thus found it was not arbitrary and capricious for Reliance to conclude she could perform her regular occupation’s material duties as of April 19, 2024. The court upheld the magistrate’s ruling, granted Reliance’s motion for judgment on the administrative record, and denied Shortill’s cross-motion.
Seventh Circuit
Bogdan v. UFCW International Union-Industry Variable Annuity Pension Fund, No. 25-cv-2671, 2026 WL 2392243 (N.D. Ill. Aug. 17, 2026) (Magistrate Judge Keri L. Holleb Hotaling). Barbara Bogdan tripped over a box at work in 2021 and broke her leg. She was placed in a full-length leg cast and wheelchair. She was treated by an orthopedic surgeon, Dr. Thomas, whose records documented improvement over the following year. She was released by Dr. Thomas to sedentary work in April 2022, a status that remained unchanged through the following months. She separately developed back pain treated by a spine specialist, Dr. Owen. By November 2022, Dr. Owen found her back “feeling substantially better” and her radiculopathy “fully resolved,” while Dr. Thomas confirmed the same month that her femur fracture had “healed” and that she remained on light duty. Bogdan retired from her employer, Kroger, in 2023, and applied for a disability pension from the UFCW International Union-Industry Variable Annuity Pension Fund. The plan awards disability pensions to participants whose covered employment terminates because of “Total and Permanent Disability,” defined as a medically determinable impairment expected to result in death or last at least twelve months that leaves the participant “unable to engage in any substantial gainful activity.” The fund denied Bogdan’s application, determining that she remained capable of light or sedentary work. Bogdan thus brought this pro se action challenging the decision, which proceeded to cross-motions for judgment. Because the fund did not timely resolve Bogdan’s administrative appeal, the parties agreed the court should review the fund’s denial de novo. The court found nothing in Bogdan’s undisputed records reflecting an impairment expected to last twelve months or more that prevented her from engaging in “any substantial gainful activity.” Instead, the court noted that Dr. Thomas released Bogdan to sedentary work by April 2022 and reaffirmed that status through the following months. Similarly, Dr. Owen released Bogdan to light duty with only modest restrictions. By November 2022 both of her conditions were substantially improved. The court emphasized that the plan defines “substantial gainful activity” broadly, expressly providing that work remains substantial “even if the amount of work activity is less or it is of a less responsible or gainful nature” than before. Bogdan’s restrictions, which included frequent positional changes, a five-pound lifting limit, no squatting, climbing, bending, or prolonged walking, thus “defeat[ed] her claim that she was unable to engage in any substantial gainful activity[.]” The court rejected Bogdan’s arguments to the contrary. Her contention that Kroger could not accommodate her medical restrictions was irrelevant, because the plan’s disability standard “does not ask whether Plaintiff could return to the same position or whether her employer had a suitable opening” but whether she could engage in “substantial gainful activity.” Also, Bogdan’s repeated citations to Social Security Administration disability standards were unavailing, as the case turned on plan language and “not whether she might qualify as disabled under a different statutory or regulatory framework[.]” Finally, Bogdan complained about a functional capacity evaluation that was scheduled but never occurred, but the court held this did not undermine the treating physicians’ repeated work releases, and in any event a procedural irregularity would not independently entitle Bogdan to relief. As a result, the court denied Bogdan’s motion, granted the fund’s, and entered judgment for the fund.
Eleventh Circuit
Mead v. Life Ins. Co. of N. Am., No. 8:24-cv-2756-TPB-AEP, 2026 WL 2444754 (M.D. Fla. Aug. 20, 2026) (Judge Tom Barber). Catherine Mead worked for approximately 19 years as a package sealer/operator for Evergreen Packaging LLC, a heavy-rated occupation requiring her to exert up to 100 pounds of force. She stopped working in 2020 due to arthritis, lupus, and fibromyalgia. She received short-term, and then long-term, disability benefits from Life Insurance Company of North America, which was the insurer of Evergreen’s ERISA-governed employee disability benefit plans. When the plan’s definition of disability shifted after 24 months to require inability to perform “any occupation” for which she was or could reasonably become qualified, LINA conducted a transferable-skills analysis. It identified two sedentary occupations which it contended Mead could perform and terminated her benefits in 2023. On appeal, LINA obtained additional physician reviews and conducted three further transferable-skills analyses, which all maintained that Mead could perform alternative occupations. As a result, it upheld the termination of Mead’s benefits, and this action followed in which Mead seeks benefits under 29 U.S.C. § 1132(a)(1)(B). The case proceeded to cross-motions for summary judgment. Applying the Eleventh Circuit’s six-step framework from Blankenship v. Metropolitan Life Insurance Co., the court first found that LINA’s Appointment of Claim Fiduciary conferred discretionary authority, making “arbitrary and capricious” the applicable standard of review. The court thus skipped the first step of deciding whether LINA’s decision was “de novo wrong,” finding that under the required deferential standard of review LINA’s ruling was reasonable. Mead contended that LINA failed to adequately consider her education, training, and experience because the disability questionnaire containing that information was never provided to the vocational reviewers who performed the transferable-skills analyses. The court “does not endorse Defendant’s failure to provide the questionnaire to its vocational specialist,” but found it did not render the ultimate determination arbitrary and capricious, as the administrative record satisfactorily documented Mead’s educational and occupational background. Furthermore, the final analysis found the identified occupations were “entry-level occupations that did not require specialized skills or training to be considered qualified.” Mead next argued the identified occupations were inconsistent with her functional limitations, pointing to her doctor’s assessment that she could reach only “occasionally.” The court acknowledged the “record contains differing assessments of Plaintiff’s reaching capacity,” but noted that LINA’s final medical review, which concluded no reaching restriction was supported, stated that Mead “demonstrated constant reaching at desk level and frequent overhead reaching.” Because “[a]n administrator does not act arbitrarily and capriciously merely because the administrative record contains conflicting medical evidence,” and a plan administrator “may reasonably credit one physician’s opinion over another,” the court found LINA’s conclusion had a reasonable evidentiary basis. Mead further argued that one of LINA’s proposed alternate occupations (“ampoule sealer”) was obsolete and did not exist in sufficient numbers in the national economy. However, the court held that “ERISA does not itself require a plan administrator to establish that a particular number of jobs exists in the national economy,” and in any event LINA’s determination did not rest exclusively on that occupation. Mead also argued LINA violated ERISA regulations by withholding the June and July 2024 transferable-skills analyses from her during the appeal, providing only the final August analysis. The court found that even assuming disclosure was required, the omission caused no prejudice. The court stated that all three analyses identified the same two occupations, Mead received the more comprehensive final analysis before LINA’s ultimate decision, she was given an opportunity to respond, and she confirmed she had no additional evidence to submit. Finally, addressing LINA’s structural conflict of interest as both claims-payer and evaluator, the court stated this was merely a factor to consider rather than a basis to alter the standard of review. The court found that Mead identified no specific evidence that LINA’s financial interest influenced its decision and noted LINA’s thorough claim handling. As a result, “Even assuming that Defendant’s determination was de novo wrong, reasonable grounds supported its conclusion that Plaintiff did not satisfy the policy’s ‘any occupation’ definition of disability.” LINA’s motion for summary judgment was thus granted, and Mead’s was denied.
Discovery
Second Circuit
Mason v. New York Life Ins. Co., No. 1:26-cv-01429 (DEH) (SDA), __ F. Supp. 3d __, 2026 WL 2445531 (S.D.N.Y. Aug. 20, 2026) (Magistrate Judge Stewart D. Aaron). William Mason was a Senior Desktop Engineer for the American Jewish Committee when he was diagnosed with long COVID in 2025. He filed a claim for benefits under AJC’s long-term disability employee benefit plan, which was insured and administered by New York Life Group Insurance Company of NY. New York Life denied the claim, and this action followed. After the administrative record was produced, the parties disputed whether Mason was entitled to discovery beyond the record. The magistrate judge set a briefing schedule for the dispute. In his briefing Mason sought (1) discovery relating to the completeness of the administrative record, including a “feedback” report and review “checklists” allegedly missing from the record, the identity of the employer of three individuals involved in claims handling, and information about deleted documents; and (2) conflict of interest discovery regarding two in-house file reviewers and other claims personnel, including their file-review statistics, financial incentives, and performance evaluations. The court stated that under ERISA courts “typically limit their review to the administrative record before the plan at the time it denied the claim,” departing only “upon a showing of good cause.” The court applied the “reasonable chance” standard (i.e., “a reasonable chance that the requested discovery will satisfy the good cause requirement”), which the parties agreed governed discovery requests beyond the administrative record. Applying these standards, the court granted narrower relief than Mason sought. On completeness, it permitted targeted interrogatories and document requests limited to the allegedly missing feedback report, the review checklists, and information about deleted documents, but denied a Rule 30(b)(6) deposition because it was “not proportional to the needs of the case.” On conflict-of-interest discovery, the court denied discovery into the file reviewers’ statistical track records because “bare numbers or percentages of claim denials are meaningless without additional context,” and that context “cannot be provided without holding mini-trials on the other claims,” which raised proportionality concerns under Rule 26(b)(1). But the court granted discovery into financial incentives, explaining that “if a decision maker were granted incentives based on the frequency of claim denials processed or other forms of compensation related to approval or denial of claims for benefits, such potential financial influences could pose a risk of arbitrary action and may well be relevant to Plaintiff’s claim.” It likewise granted discovery into performance evaluations for the claims personnel involved, reasoning that “[w]hether or not the performance of the employees involved is measured by reference to their ability to deny or terminate LTD claims directly bears on whether [the] conflict of interest biased its decision-making process.” The court gave the parties 14 days to comply with its order.
Tenth Circuit
Middleton v. Amentum Gov’t Services Parent Holdings, LLC, No. 23-2456-EFM-BGS, 2026 WL 2469897 (D. Kan. Aug. 24, 2026) (Magistrate Judge Brooks G. Severson). Jay Middleton and George A. Lawrence brought this putative class action on behalf of themselves, the Amentum 401(k) Retirement Plan, and the DynCorp International Savings Plan against Amentum Government Services Parent Holdings, LLC and numerous individual and committee fiduciary defendants, alleging breaches of fiduciary duty under ERISA §§ 502(a)(2) and 409(a) for selecting overpriced investment options that allegedly cost the plans and their participants millions of dollars during a six-year class period. Filed in 2023, the case is proceeding in phases. In phase one, a scheduling order limits discovery to class-certification issues, with merits-based discovery reserved until after plaintiffs move for class certification. Plaintiffs filed that motion in March of this year, and it remains pending. The parties now disagree about whether merits discovery can proceed. Defendants have moved to stay such discovery, “asserting that the outcome of the class certification motion will impact the overall scope of discovery under Rule 26, and that defendants should not be subjected to irrelevant, non-proportional discovery that would cause them to incur substantial costs they would not otherwise face.” Plaintiffs opposed, arguing that even if certification were denied, they could still pursue plan-wide relief in a representative capacity under ERISA, so the scope of discovery would remain essentially the same regardless of certification. The assigned magistrate judge acknowledged that stays of discovery are generally disfavored and warranted only in “the most extreme circumstances,” but recognized an exception where a pending motion “may result in either a vast expansion or vast reduction of the claims, parties and issues” in the case. The court found that class certification motions fit in this category. It dodged the issue presented by plaintiffs regarding plan-wide relief, observing that “there is no 10th Circuit authority, and the parties cite none, addressing the appropriate scope of recovery should the motion for class certification be denied.” In any event, this question was “closely intertwined with the issues raised in the motion for class certification,” and the magistrate was unwilling to “speculate” while that motion was pending before the district judge. Because of this complication, and even though the case was three years old, which “[o]rdinarily…would weigh against further delay,” the court exercised its “broad discretion” to stay merits-based discovery until the district court rules on the class certification motion. Defendants’ motion was thus granted.
Eleventh Circuit
Bennett v. Board of Directors of J.J.F. Mgmt. Servs., Inc., No. 8:26-cv-1255-CEH-CPT, 2026 WL 2450732 (M.D. Fla. Aug. 21, 2026) (Judge Charlene Edwards Honeywell). Michael D. Bennett, Josh Krumpach, and Chris Turgeon, on behalf of the JJF Management Services, Inc. Employee Stock Ownership Plan, and a putative class of participants and beneficiaries, sued the plan’s board of directors, individual board members, Capital Trustees LLC, the estate representatives of two deceased individuals connected to the transaction at issue in the case, and other affiliated defendants under ERISA §§ 502(a)(2) and (a)(3). Plaintiffs have asserted seven counts, including breach of fiduciary duty, improper fiduciary appointment and monitoring, prohibited transactions and knowing participation in prohibited transactions under ERISA § 406, co-fiduciary liability, and indemnification. The board defendants and several individual defendants moved to dismiss and simultaneously moved to stay all discovery pending resolution of that motion. The latter motion was at issue in this ruling. Defendants’ request for a stay rested primarily on the Supreme Court’s recent decision in Cunningham v. Cornell University (covered in our April 23, 2025 edition), which they interpreted as directing “district courts to stay discovery in ERISA cases” because “the risk of an ‘avalanche’ of meritless litigation will result if a district court does not limit discovery before screening ERISA claims.” Plaintiffs opposed, arguing that defendants had not shown the kind of unusual circumstances required to depart from the court’s normal practice of allowing discovery to proceed alongside a pending motion to dismiss. Plaintiffs further argued that a stay would cause them prejudice given that two participants connected to the challenged transaction were deceased and Capital Trustees was “winding down,” which threatened the availability of witnesses, testimony, and records. The court denied the motion, noting that the Eleventh Circuit has held that the mere pendency of a motion to dismiss does not itself justify a stay; instead, “a stay of discovery pending the resolution of a motion to dismiss is the exception, rather than the rule.” The court further found that the required “showing of good cause and reasonableness” was lacking here. Defendants’ own motion represented they had “already preserved all documents and information potentially relevant to the claims,” undercutting any claim that ongoing discovery would impose meaningful hardship. The court also rejected the argument that the pending motions to dismiss alone supplied good cause, and found that a preliminary look at those motions did not reveal “an immediate and clear possibility” that the entire action would be dismissed. The court also specifically rejected defendants’ reliance on Cunningham, ruling that the “sweeping directive” argued by defendants “is unsupported by the Supreme Court’s decision.” Rather than requiring categorical discovery stays, the court stated that Cunningham pointed to cost-shifting under 29 U.S.C. § 1132(g)(1) as ERISA’s tool for deterring meritless suits. The Supreme Court also simply acknowledged that district courts retain “discretionary authority to expedite or limit discovery as necessary to mitigate unnecessary costs,” which hardly amounted to a sweeping stay mandate. As a result, defendants’ motion to stay was denied.
ERISA Preemption
Ninth Circuit
Sample v. AT&T Mobility Services LLC, No. CV 25-10000 FMO (ASx), 2026 WL 2392358 (C.D. Cal. Aug. 17, 2026) (Judge Fernando M. Olguin). Walter Sample worked for AT&T Mobility Services LLC from 2023-24. During his employment, Sample participated in the company’s Umbrella Benefit Plan No. 3, which encompassed the AT&T Mobility Orange Medical Program. Eligible employees were required to pay a monthly contribution to participate in the program, which imposed a “Tobacco User Surcharge” that increased an employee’s required contribution under certain circumstances. Sample was hit with a $37.50 per-paycheck tobacco surcharge deduction, which he alleged was unlawful. He filed a putative class action in state court seeking to represent all current and former California employees of AT&T who were assessed a tobacco surcharge, asserting six California Labor Code and Business and Professions Code claims. These claims included unpaid minimum wages, untimely final wages, untimely wages during employment, inaccurate wage statements, illegal wage deductions, and unfair business practices. AT&T removed the case to federal court, asserting that Sample’s claims were completely preempted by ERISA. Sample moved to remand, arguing the case involved only state law claims and that AT&T had a duty independent of ERISA to not illegally deduct wages from his paycheck. In this order the court denied Sample’s motion to remand, agreeing with AT&T that Sample’s claims were preempted. The court invoked the Supreme Court’s controlling case on the issue, Aetna Health Inc. v. Davila, and explained that while state law claims ordinarily do not support federal question jurisdiction merely because a federal defense exists, ERISA is one of the rare statutes whose civil enforcement scheme is so complete that “any civil complaint raising this select group of claims is necessarily federal in character.” The court applied Davila’s two-part test, which requires both that “an individual, at some point in time, could have brought [the] claim under ERISA § 502(a)(1)(B),” and “there is no other independent legal duty that is implicated by a defendant’s actions.” The court stated, “There appears to be no dispute that the first prong of the Davila test is satisfied.” Sample was a plan participant and thus was exactly the type of party authorized to sue under § 502(a)(1)(B). Furthermore, claims challenging the legality of tobacco surcharges are, as the court observed, “commonly brought under ERISA,” citing the Ninth Circuit’s own recent decision in Platt v. Sodexo, S.A. as an example. (Platt was Your ERISA Watch’s case of the week in our August 13, 2025 edition.) As for the second prong, the court rejected Sample’s argument that AT&T owed him an “independent duty to not illegally take wages[.]” The court stated that his claims are “dependent on the existence of the ERISA plan,” and “determining whether the $37.50 deduction from plaintiff’s paycheck was ‘illegal’ under state law requires the court to determine whether the tobacco surcharge was permissible under ERISA.” As a result, “plaintiff’s claims ‘cannot be regarded as independent of ERISA.’” Having found both Davila prongs satisfied, the court thus concluded that Sample’s state law claims were preempted and denied his motion to remand.
Medical Benefit Claims
Tenth Circuit
M.A. v. United Healthcare Ins. Co., No. 1:21-cv-00083-JNP, 2026 WL 2445395 (D. Utah Aug. 20, 2026) (Judge Jill N. Parrish). M.A., individually and on behalf of his minor daughter Z.A., sued United Healthcare Insurance Company, United Behavioral Health, and the Kaiser Aluminum Fabricated Products Welfare Benefit Plan for plan benefits after defendants denied coverage for Z.A.’s mental health treatment at BlueFire Wilderness Therapy and Uinta Academy. Medical records showed that Z.A. was suffering from escalating self-harm, suicidal ideation, and substance use. Defendants initially denied the BlueFire claim under a policy categorizing wilderness therapy as an unproven, excluded treatment, and on appeal further argued that BlueFire did not meet the definition of a residential treatment center. Defendants denied continued Uinta coverage after September 2018 as not medically necessary. In September of 2023, the court granted summary judgment to plaintiffs, ruling that both denials were arbitrary and capricious because defendants failed to meaningfully engage with Z.A.’s treating providers and failed to explain their reasoning with citations to the record. The court remanded for further review, with instructions limiting defendants to only the rationales and record citations previously conveyed to plaintiffs before litigation began. (Your ERISA Watch covered this ruling in our October 4, 2023 edition.) On remand, defendants again denied both claims, and the case returned to court where both parties filed competing motions. The court first addressed the unusual procedural posture, treating plaintiffs’ “Renewed Motion for Benefits, Attorney Fees, Prejudgment Interest, and Costs” and defendants’ cross-motion as ordinary cross-motions for summary judgment on the post-remand record. Over plaintiffs’ objections, the court confirmed that arbitrary and capricious review continued to apply to the post-remand determinations. Before addressing the merits of the post-remand decisions, the court agreed with plaintiffs (and defendants conceded) that defendants had disregarded the court’s instruction limiting them to the rationales and record citations that existed pre-litigation. Defendants justified this by arguing that the instructions “go against Tenth Circuit precedent.” The court was unhappy with defendants, but acknowledged that its remand limitations were “too restrictive” because defendants’ original denial letters contained no record citations at all, making literal compliance impossible. “Remand instructions should encourage attention to the substantive issues without unduly constraining the process[.]” Thus, the court declined to enforce its prior limit on citing evidence, although it continued to prohibit defendants from raising new rationales for denial. Under this framework, the court found most of defendants’ post-remand reasoning permissible. For BlueFire, the court allowed defendants to rely on the American Academy of Child and Adolescent Psychiatry Principles of Care to support their pre-litigation theory that BlueFire lacked the intensity of services required of a residential treatment center. For Uinta, the court found that defendants’ introduction of the CALOCUS-CASII Guidelines in the first post-remand denial letter was technically a new rationale, because defendants had used only the Optum Level of Care Guidelines pre-litigation, but held the error harmless because the first letter also applied the original Optum guidelines. On the merits, the court found that defendants’ post-remand denial letters were “predicated on a reasoned basis,” explained their conclusions, cited the record, and directly addressed plaintiffs’ letters of medical necessity. As a result, the court granted defendants’ motion for summary judgment and denied plaintiffs’ motion to the extent it sought an award of benefits. However, the court exercised its discretion to award plaintiffs attorney’s fees for both the pre-remand and post-remand litigation on the grounds that plaintiffs achieved “some degree of success on the merits” by obtaining an order that defendants’ initial denials were arbitrary and capricious, the current proceedings were made necessary by that conduct, and fee-shifting would deter plan administrators from repeating such conduct. The court directed plaintiffs to submit a fee affidavit in a separate motion.
Pension Benefit Claims
Sixth Circuit
Neack v. UC Health LLC, No. 1:22-cv-67, 2026 WL 2436353 (S.D. Ohio Aug. 20, 2026) (Judge Jeffery P. Hopkins). Dr. Lawrence Neack is retired. He worked for Alliance Primary Care (APC) and its predecessor on two occasions: from 1995 to 2000, and again from 2005 to 2010. When Neack sought pension benefits under the UC Health Retirement Plan, UC Health told him he had not attained the required “Five Years of Participation” for vesting. This decision was based on a 1998 amendment (the “Gamble Amendment”) to an earlier, predecessor pension plan which changed how APC physicians accrued a “Year of Participation” from an “hour counting method” to an “elapsed time method.” Neack unsuccessfully appealed to the plan’s Benefits Committee and then filed this action, asserting a benefits claim under 29 U.S.C. § 1132(a)(1)(B). The parties filed cross-motions for judgment, disputing (1) whether the administrative record was properly authenticated, (2) whether de novo or arbitrary and capricious review applied, and (3) whether the Committee’s denial was arbitrary and capricious. On authentication, the court rejected Neack’s argument that the record lacked certification, crediting UC Health’s declaration that the documents produced “are the documents that she reviewed, relied upon, compiled, or generated” in assessing the claim and appeal. The court found Neack’s suggestion of “contradictions” among UC Health witnesses to be unsubstantiated because he “has not provided actual evidence of those contradictions in his motion or response, nor specifically identified any document or type of document that is missing from, or otherwise at issue in, the administrative record.” On the standard of review, the court ruled that because the plan gave the Committee discretionary authority to determine eligibility for benefits, the arbitrary and capricious standard applied. Neack argued for de novo review based on his allegations of an incomplete record, but because that argument had already been rejected, it failed here as well. On the merits, the court determined that the Gamble Amendment applied, and after evaluating each of Neack’s employment periods, agreed with the Committee that Neack had only accumulated four years and eleven months of participation – one month short of the requirement. The court rejected Neack’s argument that the Gamble Amendment merely offered an “alternative path,” thus allowing continued use of the hour-counting method, finding the plan clear and unambiguous that hour-counting no longer applied. The court was mindful of the Sixth Circuit’s admonition that judges “are not actuaries or the ‘fairness police’” and need only ask “one question… Is the Plan language clear?” It was. The court also held that Neack could not aggregate his two APC employment periods, because the five-year gap in between constituted a break in service. The applicable plan language disregarded pre-break service for vesting purposes where the break equals or exceeds the participant’s pre-break Years of Participation, which was the case here. Finally, the court rejected Neack’s argument that applying the Gamble Amendment violated ERISA’s anti-cutback rule, 26 U.S.C. § 411(d)(6). The court held that a plan amendment changing the method of crediting service for vesting purposes does not violate the anti-cutback rule so long as it does not reduce the amount of a participant’s accrued benefit or the rate at which it accrues. Here, “the Gamble Amendment altered the method by which Years of Participation were credited” without touching the plan’s benefit formula, which was acceptable. As a result, the court granted UC Health’s motion for judgment, denied Neack’s, and entered judgment for UC Health.
Tenth Circuit
Crawford v. The Guaranty State Bank & Trust Co., No. 22-2542-JAR-GEB, 2026 WL 2425789 (D. Kan. Aug. 19, 2026) (Judge Julie A. Robinson). David Crawford worked for the Guaranty State Bank & Trust Company for almost three decades before voluntarily resigning in 2020. In 2002, Crawford and the Bank entered into an Executive Salary Continuation Agreement, an unfunded, non-qualified ERISA plan administered by the Bank’s board of directors. The agreement fully vested Crawford’s supplemental retirement benefits but included a forfeiture clause. If “grounds ‘for cause’ exist at the time the Executive’s employment terminates for any reason,” including gross negligence, willful violation of law, intentional failure to perform stated duties, or breach of fiduciary duty involving personal profit, “all benefits provided herein shall be forfeited.” Seventeen months after Crawford resigned, the board terminated his benefits, relying on a Kansas Bureau of Investigation (“KBI”) affidavit detailing an undisclosed profit-sharing arrangement Crawford allegedly maintained with a bank customer regarding cattle. The bank contended that this arrangement caused roughly $2 million in losses after nearly 1,660 head of cattle went missing. (Crawford was criminally charged by Kansas authorities, but the charges were later dismissed without prejudice.) Crawford sued under 29 U.S.C. § 1132(a)(1)(B) to recover his benefits, and the Bank and board counterclaimed for recoupment under Kansas law. In a 2024 order, the court held that the board’s interpretation of the forfeiture clause was reasonable but ruled the termination decision was arbitrary and capricious on procedural grounds. The court found that the administrative record lacked any documents from the internal investigation even though they were referenced by the board’s denial letters, the board never produced its investigation to Crawford, and there was some indication the board’s inherent conflict of interest had played a role. The court remanded for a full and fair review. (Your ERISA Watch covered this ruling our May 29, 2024 edition.) On remand, the board obtained the Bank’s investigative file and the KBI’s underlying interview recordings, held two lengthy meetings, and again terminated Crawford’s benefits. Crawford filed an amended complaint challenging the remand decision, and the parties filed cross-motions for summary judgment on the renewed ERISA claim, agreeing to defer litigation of defendants’ counterclaims until and unless Crawford prevailed. Applying arbitrary and capricious review, the court first addressed Crawford’s procedural objections. It rejected his argument that the board’s meeting minutes fell outside the administrative record merely because they were not disclosed before his appeal, because the minutes were “relied upon” or “generated” in making the decision. The court also rejected Crawford’s claim that the Board ignored ten categories of evidence he raised on appeal because the board’s “lengthy and detailed final termination letter took on all of these arguments and thoroughly explained why the Board rejected them.” And it rejected Crawford’s argument that the board withheld certain documents from the initial investigation, finding no evidence any such documents existed. On conflict of interest, the court held that, unlike the original proceeding, the remand record showed the board “took…steps to reduce potential bias and to promote accuracy,” including recusing one board member and acquiring the KBI file. On the merits, the court walked through each of the four forfeiture categories the board invoked. It found the board reasonably concluded Crawford’s use of an improper cattle-tracking method reflected “gross negligence,” reasonably found his concealed profit-sharing arrangement was a “willful violation” of the Bank’s code of conduct, and reasonably found a “breach of fiduciary duty involving personal profit” notwithstanding Crawford’s argument that he ultimately lost money, as the arrangement’s profit motive was sufficient. The court emphasized that credibility determinations are “the province of the Plan administrator,” and agreed with the board that “the objective evidence supports the existence of a scheme[.]” Because the Board’s factual findings were supported by “more than a scintilla” of evidence and its reasoning was “predicated on a reasoned basis,” the court concluded the remand decision was neither arbitrary nor capricious. The court thus granted defendants’ motion for summary judgment and denied Crawford’s. The court ordered defendants to update the court as to its intentions regarding their recoupment counterclaims.
Plan Status
Second Circuit
Kovacs v. Moradi, No. 25-CV-10336 (JPO), 2026 WL 2426784 (S.D.N.Y. Aug. 19, 2026) (Judge J. Paul Oetker). David Kovacs, a former senior executive of AudioEye, Inc., alleges that AudioEye’s CEO, David Moradi, and its Executive Chairman, Carr Bettis, ran “schemes” in which they looted companies they controlled and retaliated against those who objected. Kovacs alleged that after he refused to assist in one securities fraud scheme and reported it internally and to the SEC, he was terminated. AudioEye revoked Kovacs’ vested restricted stock units (RSUs), and he claimed was targeted with retaliatory lawsuits and threats. Among the eleven counts in his sprawling complaint, which also included civil RICO, securities fraud, breach of fiduciary duty, and various common law tort claims, Kovacs brought two ERISA counts against AudioEye, Moradi, and Bettis: a Section 510 whistleblower-retaliation claim (Count III) and a claim for interference with ERISA-protected benefits under Sections 502(a)(1)(B), 502(a)(3), and 510 (Count IV). Both claims were premised on the theory that the RSUs granted to him were ERISA-covered benefits that defendants had wrongfully revoked or interfered with. AudioEye, Moradi, and Bettis moved to dismiss, arguing among other things that the RSUs were not governed by ERISA. The court agreed and dismissed both ERISA counts. It explained that ERISA recognizes only two types of covered plans: “employee welfare benefit plans” and “employee pension benefit plans.” Kovacs conceded that the only relevant benefits at issue were the RSUs and argued that whether those plans qualified as ERISA plans was merely “a merits characterization argument” unsuitable for resolution on a motion to dismiss. The court disagreed, stating that “[w]here the record contains the undisputed terms of the disputed plan, a court may decide the applicability of ERISA as a matter of law.” The court further stated that stock option benefits generally fall outside of ERISA’s scope: “courts have held that employee stock option plans are not employee benefit plans subject to ERISA because their purpose is to operate as an incentive and bonus program, and not as a means to defer compensation or provide retirement benefits.” Such equity award plans are categorically distinct from ERISA welfare benefit plans, which exist “for the purpose of providing its participants or their beneficiaries benefits such as health care, vacation, disability, and unemployment.” The RSUs did not qualify as pension benefits because such benefits “are systematically deferred to the termination of covered employment or beyond, or so as to provide retirement income to employees.” Because the RSU agreements “clearly contemplate[d] that the RSUs will vest throughout Kovacs’s employment,” rather than after retirement, they were not pension benefits and thus “ERISA does not apply.” As a result, the court dismissed Kovacs’ two ERISA claims. The court dismissed the remainder of Kovacs’ claims as well, but denied defendants’ motion for sanctions, even though the court was unhappy with Kovacs’ conduct. (Kovacs made an angry phone call in which he stated he would “smear” defendants, said one defendant “doesn’t belong to be fucking breathing on this fucking planet,” and threatened to “rip him to fucking half with [his] fucking hands.”) The court “cautioned” Kovacs and his counsel instead, stating “their conduct has come dangerously close to sanctionable.”
Tenth Circuit
Cregan v. Unum Life Ins. Co. of Am., No. 24-CV-340-DES, 2026 WL 2427920 (E.D. Okla. Aug. 19, 2026) (Magistrate Judge D. Edward Snow). Jeffrey Cregan suffered a workplace injury and sought payment under a Voluntary Accident Plan issued by Unum Life Insurance Company of America and offered to him through his employer, Morton Buildings. Unum denied his claim, so Cregan brought this action in state court asserting breach of contract and bad faith. Unum removed the case to federal court, after which it filed a “Motion regarding Applicability of ERISA” in which it contended that the plan was governed by ERISA and completely preempted Cregan’s state law claims. Cregan contended in response that the plan fell outside ERISA’s scope under the regulatory “safe harbor” provision, 29 C.F.R. § 2510.3-1(j), or, alternatively, under the “Conventional Test” for identifying an ERISA plan. In this order the court first analyzed the safe harbor provision, which provides that a program is exempt from ERISA if “(1) no contribution is made by the employer; (2) participation in the program is completely voluntary for the employees; (3) the sole functions of the employer are to permit the insurer to publicize the program to employees and to collect premiums through payroll deductions; and (4) the employer receives no consideration in connection with the program.” Here, the plan failed at least the first three requirements. On the first factor, while employees were required to “make contributions for coverage,” the plan also made Morton “liable for premium for coverage during the grace period.” On the second factor, the court rejected Cregan’s argument that the plan was “completely voluntary,” relying on the Tenth Circuit’s 1997 ruling in Gaylor v. John Hancock Mutual Life Ins. Co. that an optional benefit “cannot be severed from the comprehensive plan.” Because ERISA governed the mandatory portions of Morton’s broader benefits package, “it must also apply to the group accident portion of the plan, making the coverage not completely voluntary.” On the third factor, the court found Morton did far more than merely “permit the insurer to publicize the program…and collect premiums.” Instead, Morton “determined that all employees were eligible,” “determined how premiums would be paid,” was “responsible for premiums during any grace periods,” and “determined when an employee’s eligibility began and when it was terminated.” As a result, the safe harbor provision did not apply. The court thus turned to the “Conventional Test,” in which “five elements must be met: (1) a plan, fund, or program; (2) established or maintained; (3) by an employer; (4) for the purpose of providing health care, disability and/or death benefits; (5) to participants or beneficiaries.” The parties agreed that four of the elements were satisfied, but disagreed as to (2), whether the plan was “established or maintained” by Morton. The evidence showed that Morton “selected and secured the Policy,” and was “clearly involved in the administration of the Plan, determining premiums, paying premiums during grace periods, acting as the agent of the employee, providing Unum Life support on FMLA issues and many others.” As a result, the court found this element satisfied as well. Because the court determined that the plan was governed by ERISA, it further determined that Cregan’s state law claims were preempted and thus “fail as a matter of law.”
Provider Claims
Fifth Circuit
Abira Medical Laboratories LLC v. Imagine 360 Administrators LLC, No. 3:24-CV-1248-N, 2026 WL 2447147 (N.D. Tex. Aug. 19, 2026) (Judge David C. Godbey). Frequent litigant Abira Medical Laboratories, a/k/a Genesis Diagnostics, provided lab services between 2016 and 2021 to employees enrolled in self-funded health plans administered by Imagine 360 Administrators. Genesis sued Imagine 360 in state court as the assignee of patients’ benefits, seeking to recover under 224 separate health care claims over 60 self-funded plans and 64 plan documents. Genesis asserted claims for breach of contract, account stated, and quantum meruit (the last of which Genesis later conceded). Imagine 360 removed the case to federal court, arguing that Genesis’ claims were preempted by ERISA, and moved for summary judgment on that basis. In supplemental filings, Imagine 360 acknowledged it could not identify the governing plan documents for 28 of the underlying health care claims, and separately identified four plans as governmental or church plans exempt from ERISA. The court first denied summary judgment on the governmental and church plans, as such plans are excluded from ERISA pursuant to 29 U.S.C. § 1003(b)(1)-(b)(2). It likewise denied summary judgment on the 28 unidentified-plan claims, holding that Imagine 360 could not demonstrate preemption “[w]ithout evidence of the plans associated with those claims[.]” On the remaining claims, the court first addressed Imagine 360’s threshold argument that it was not a proper ERISA defendant “because it did not possess final authority over benefit determinations for its ERISA plan clients and it was not obligated or responsible for paying benefits under those ERISA plans.” This argument was not good enough at the summary judgment stage. The court explained that “[t]he proper defendant in an ERISA claim for wrongful denial of benefits is the party that controls administration of the plan,” and found that Genesis had presented evidence indicating that Imagine 360 was a responsible payor, which created “a genuine dispute of material fact as to whether Imagine 360 maintained control over administration of claims under the plans.” As for the merits of Imagine 360’s preemption argument, the court held that Genesis’ breach of contract claim was preempted under Fifth Circuit precedent which prohibits state law claims that “seek to recover benefits owed under the plan to a plan participant who has assigned her right to benefits to the [administrator].” The court reached the same conclusion on the account stated claim. The court relied on the Supreme Court’s instruction that “any state-law cause of action that duplicates, supplements, or supplants the ERISA civil enforcement remedy” is preempted. Because Genesis’ account stated theory sought to “rectify a wrongful denial of benefits promised under ERISA-regulated plans,” the court found it “related to” the ERISA plans and was therefore preempted. The court declined, however, to grant summary judgment on Imagine 360’s alternative argument that Genesis failed to state a claim. The court found the record insufficient to evaluate the remaining claims tied to the four exempt plans and the 28 unidentified-plan claims. Rather than dismiss those claims outright, the court granted Genesis “leave to amend its petition to assert a claim for the benefits associated with those health care claims.”
CHCA Bayshore, L.P. v. Louisiana Health Service & Indemnity Co., No. 3:25-CV-2895-B, 2026 WL 2455361 (N.D. Tex. Aug. 21, 2026) (Judge Jane J. Boyle). Six hospitals sued Louisiana Health Service & Indemnity Company, d/b/a Blue Cross Blue Shield of Louisiana, seeking over $673,000 for unpaid or underpaid claims arising from treatment provided to 15 Texas patients insured under BCBSLA plans. The Hospitals had Hospital Service Agreements (HSAs) with non-party Blue Cross Blue Shield of Texas that set discounted rates applicable to any Blue Cross Blue Shield-insured patient through the interstate “Blue Card Program.” Under the program, BCBSTX (the “Host Plan”) prices and forwards claims to BCBSLA (the “Home Plan”) for coverage determination and payment. The Hospitals sued as assignees of their patients’ benefits, asserting six counts: a petition to compel arbitration, breach of the HSAs, breach of an implied-in-fact contract, an ERISA benefits claim, breach of contract for non-ERISA plans, and promissory estoppel. BCBSLA moved to dismiss the ERISA count for lack of standing under Rule 12(b)(1), the state contract counts for lack of personal jurisdiction under Rule 12(b)(2), several counts under Rule 12(b)(6), and argued two counts were time-barred. On the ERISA count, BCBSLA argued that the hospitals’ claims were prohibited by anti-assignment clauses in the plans, which it provided to the court. The court treated BCBSLA’s challenge as factual rather than facial, meaning the hospitals bore the burden of proving standing by a preponderance of the evidence without any presumption of truth for their jurisdictional allegations. The hospitals argued that BCBSLA had waived or was estopped from invoking the clause because it never raised anti-assignment as a ground for denying any claim. The court found the case “indistinguishable” from the Fifth Circuit’s 2020 decision in Cell Science Systems Corp. v. Louisiana Health Service in ruling that there was no indication that BCBSLA either misrepresented or misled the hospitals about its defense. Because the hospitals offered insufficient evidence supporting waiver or estoppel, the court dismissed the ERISA count for lack of subject matter jurisdiction. On personal jurisdiction, the court declined to exercise pendent personal jurisdiction over the state contract counts because the ERISA count that could have anchored it had been dismissed. Evaluating specific personal jurisdiction directly, the court grouped the hospitals’ asserted contacts into two “buckets”: the patients’ Texas residency and access to care through the Blue Card Program, and BCBSLA’s alleged obligations under the HSAs’ Texas choice-of-law clause. On bucket one, the court held that “an out-of-state insurer does not subject itself to personal jurisdiction in a forum state by verifying coverage for treatment of the insured in that state and paying some of the bills for that treatment.” Furthermore, participation in a multistate program like Blue Card did not show purposeful availment. As for bucket two, the choice-of-law clause, the court held it was insufficient alone to provide standing. “[T]he presence of a choice-of-law clause is not sufficient in itself to establish personal jurisdiction” absent other purposeful-availment contacts, and nothing suggested that BCBSLA participated in negotiating or even knew of the clause. The court therefore dismissed the state contract counts under Rule 12(b)(2). It also denied the hospitals’ request for jurisdictional discovery because “the lack of personal jurisdiction here is clear and BCBSLA’s motion to dismiss did not raise issues of fact. Second, the Hospitals’ request is deficiently vague.” The court granted the hospitals leave to amend, finding amendment was not clearly futile because additional evidence might cure the standing and jurisdictional defects. The court deferred ruling on BCBSLA’s challenge to the arbitration count until after the amendment period closes.
Zenith Surgery Center, PLLC v. Occidental Petroleum Corp., No. H-24-3165, 2026 WL 2394081 (S.D. Tex. Aug. 17, 2026) (Judge Lee H. Rosenthal). This is the first of two cases this week involving Zenith Surgery Center and Judge Rosenthal. In this case Zenith and Sonazo Anesthesia, PLLC provided medical treatment in 2020 to two beneficiaries of Anadarko Petroleum Corporation’s employee health benefits plan. (Defendant Occidental acquired Anadarko in 2019.) The patients executed assignments of benefits to Zenith as part of registration. Before treating either patient, Zenith called United, the plan’s claims administrator, to confirm coverage. Zenith alleged that United never disclosed the plan’s anti-assignment clause or provided plan documents during those calls. After treatment, Zenith and Sonazo submitted roughly $1.4 million in claims, which United began denying in early 2022 “on the ground that coverage had been cancelled or terminated.” On appeal in 2023, the administrative committee added for the first time, three years after the treatment, that “the Anadarko Petroleum Health Benefits Plan prohibits an assignment of claims.” Zenith and Sonazo thus brought this action, asserting ERISA claims for denial of benefits and breach of fiduciary duty, plus state law claims for breach of contract, promissory estoppel, and quantum meruit. The court ordered jurisdictional discovery, which was followed by a summary judgment motion by defendants. Defendants argued that the anti-assignment clause deprived Zenith and Sonazo of standing, that the fiduciary duty claim was duplicative, and ERISA preempted plaintiffs’ state law claims. On the anti-assignment issue, the court explained that a valid anti-assignment provision divests a provider of standing, but such clauses are subject to waiver and estoppel. The court cited two Fifth Circuit cases applying the estoppel doctrine in provider cases: Hermann Hospital v. MEBA Medical & Benefits Plan, and Angelina Emergency Medicine Associates PA v. Blue Cross and Blue Shield of Alabama. (The latter was covered in our October 29, 2025 edition.) The court found that the fact pattern in this case was different from both and “does not fall cleanly into any of the Fifth Circuit’s precedents.” The court also found that despite the jurisdictional discovery, “the present record is insufficient to permit a ruling as a matter of law as to whether Occidental and Anadarko are estopped.” The court thus denied summary judgment, determining that a bench trial was necessary, as in the Hermann case. Moving on to the duplicative claim argument, the court agreed with defendants, ruling that a plaintiff “may not simultaneously plead claims” for benefits and for breach of fiduciary duty when “the essence” of both is the same underlying failure to pay. Because the fiduciary duty claim here sought “recovery of the same unpaid benefits allegedly owed under the Plan,” it was dismissed as duplicative. The court denied summary judgment to defendants on their preemption argument, however. Relying on Access Mediquip LLC. v. UnitedHealthcare Ins. Co. (which was a star player in last week’s notable decision from the Ninth Circuit), and contrary to the holding of our case of the week, the court stated that misrepresentation-based claims premised on what a claim administrator told a provider during a pre-treatment verification call are not preempted. This was because such claims do not “affect an aspect of a relationship that is comprehensively regulated by ERISA,” and ERISA “imposes no fiduciary responsibilities in favor of third-party health care providers regarding the accurate disclosure of information.” The court emphasized that any claims regarding improper plan administration would be preempted, but “‘insofar as’ these claims are asserted based on the independent misrepresentations allegedly made to Zenith and Sonazo about the reimbursements they would receive, those claims are not preempted.” The case will thus proceed to trial, where the court will revisit the estoppel and preemption arguments “on a more developed record.”
Zenith Surgery Center, PLLC v. TE Connectivity, No. H-25-3867, 2026 WL 2394079 (S.D. Tex. Aug. 17, 2026) (Judge Lee H. Rosenthal). In our second Zenith Surgery case, issued the same day as the first one, Zenith treated a TE Connectivity employee after verifying his coverage under TE Connectivity’s health benefits plan at intake. TE Connectivity “held itself out to be the responsible payor” for the treatment, and the patient assigned Zenith his rights to plan benefits. Zenith treated the patient in 2020 and alleged it timely submitted claims under a COVID-19 federal filing extension, but TE Connectivity concluded the claims were untimely and refused to pay, resulting in a $748,221.19 shortfall. As in the previous case, Zenith asserted an ERISA benefits claim, an ERISA breach of fiduciary duty claim, and state law claims for breach of contract, promissory estoppel, and quantum meruit. TE Connectivity moved to dismiss, arguing that (1) Zenith lacked statutory standing because of the plan’s anti-assignment clause, (2) Zenith failed to plausibly plead entitlement to benefits, (3) the fiduciary duty claim was duplicative, and (4) ERISA preempted the state-law claims. On standing, the court declined to resolve the anti-assignment question at the pleading stage, relying on its decision in the other Zenith case discussed above. The court observed that “[b]oth before and after Angelina Emergency, courts have found that whether an anti-assignment clause bars ERISA claims is more appropriate for resolution on summary judgment than a motion to dismiss.” The court agreed with Zenith that “discovery is needed into the parties’ communications, TE Connectivity’s agents’ representations to Zenith, and Zenith’s reliance on those representations,” as well as “what Zenith communicated to TE Connectivity about the assignment.” On the issue of plausible pleading, the court rejected TE Connectivity’s argument that Zenith needed to allege the specific medical services provided and the plan provisions violated. Zenith had alleged that it verified coverage, received an assignment, provided treatment, and timely submitted claims, which was sufficient. Compliance with plan standards “is necessarily a factually intensive inquiry that is inappropriate for resolution via a motion to dismiss.” The court likewise rejected TE Connectivity’s exhaustion argument, explaining that exhaustion “is an affirmative defense” rather than a jurisdictional bar. Thus, Zenith was not required to plead around exhaustion, and “silence on exhaustion is not a basis to grant a motion to dismiss.” This issue, like estoppel, was “better resolved at summary judgment.” Defendants finally scored a win with its duplicative pleading argument. As in the previous case, the court agreed that Zenith’s fiduciary duty claim must be dismissed because it was too similar to its benefits claim; both “ha[ve] the same underlying injury: the alleged failure to adequately pay benefits.” Finally, on defendants’ preemption argument, the court again arrived at the same conclusion as in the previous case. To the extent Zenith’s claims depended on proving TE Connectivity “improperly administered the Plan,” they were preempted, but pursuant to Access Mediquip, “insofar as” the claims rested on “independent misrepresentations to Zenith during the verification call that will not involve consideration of whether TE Connectivity properly administered the Plan,” the claims were not preempted. The court thus denied dismissal of the state law claims, and the case will proceed on the same summary judgment track as the case against Occidental discussed above.
Venue
Eleventh Circuit
Bennett v. Hartford Life & Accident Ins. Co., No. 25-CV-21039-RAR, 2026 WL 2450695 (S.D. Fla. Aug. 21, 2026) (Judge Rodolfo A. Ruiz II). After Zhane Bennett filed this action for ERISA plan benefits, her original counsel withdrew, she briefly proceeded pro se, she unsuccessfully sought an extension to find new counsel, and eventually she retained new representation. Seventeen months into the litigation, after a mediation, a settlement conference, and the filing of cross-motions for summary judgment, Bennett filed a motion to (a) transfer the case to the Southern or Eastern District of New York under 28 U.S.C. § 1404(a) (which allows transfer “[f]or the convenience of parties and witnesses, in the interest of justice”), or alternatively (b) to dismiss it without prejudice. Bennett’s argument was that she lived in New York, had no connection to Florida, and had not known her prior counsel would file there. Hartford opposed transfer as untimely and prejudicial but did not respond to the alternative dismissal request. The motion was assigned to a magistrate judge, who did not reach the § 1404(a) transfer arguments the parties had briefed. Instead, the magistrate concluded sua sponte that venue was improper under 28 U.S.C. § 1406(a) based on “the Complaint’s failure to plead venue,” and recommended dismissal without prejudice on the ground that Hartford’s failure to respond to Bennett’s alternative dismissal request amounted to a waiver. Hartford timely objected, arguing that venue was in fact proper, that it had adequately signaled its wish to litigate the case to judgment on the pending summary judgment motions, and that any dismissal should be conditioned on Bennett paying Hartford’s attorneys’ fees and costs should she ever refile the same claim. The district court judge agreed with the magistrate’s ultimate recommendation of dismissal without prejudice, but “the Court’s determination rests on different reasoning than the Report’s.” The court held that venue was proper in the Southern District of Florida under ERISA, which permits suit “in the district where the plan is administered, where the breach took place, or where a defendant resides or may be found.” Citing the Eleventh Circuit’s description of that provision as “liberal” and “broad,” the court ruled that Hartford, a nationwide insurer doing business in the district, could be “found” in the district. Furthermore, the court noted that Bennett’s complaint alleged Hartford did business in the district, and that Hartford never contested venue in its answer. Because venue was proper, the court turned to § 1404(a) and found transfer unwarranted. The court minimized Bennett’s complaints of inconvenience because this was “an ERISA claim for benefits following an administrative appeal,” and thus “more closely resembles an appeal based on review of the record and dispositive motion practice rather than a triable action.” The court also emphasized the advanced state of litigation and Bennett’s inconsistent conduct; she had fought to remain in the forum after her prior counsel withdrew, sought an extension to find new counsel, proceeded pro se for months, and only requested transfer after obtaining new representation, undercutting her claim that she had been unaware of the filing location or was unable to litigate there. Moving on to Bennett’s alternate request for dismissal, the court construed it as a motion for voluntary dismissal under Federal Rule of Civil Procedure 41(a)(2) and granted it, because Hartford had not addressed it in its response. As for Hartford’s request to condition dismissal on future fee-shifting under Rule 41(d), the court identified a circuit split over whether “costs” under that rule includes attorneys’ fees. The Sixth Circuit excludes them, the Second, Eighth, and Tenth Circuits allow them, and the Third, Fourth, Fifth, and Seventh Circuits allow them only where the underlying statute independently authorizes fee-shifting. The controlling Eleventh Circuit had not weighed in on the issue. The court adopted the latter approach, reasoning that Rule 41(d)’s text “expressly authorizes the award of costs but is silent on fees,” and that “ERISA expressly distinguishes between costs and attorneys’ fees” in 29 U.S.C. § 1132(g). The court therefore declined to condition dismissal on fee-shifting. However, it did require, under its “broad equitable discretion” to “do justice between the parties,” that Bennett reimburse Hartford’s litigation costs if she ever refiles the same claim. As a result, the court dismissed the action without prejudice (with the caveat regarding costs), and denied both pending summary judgment motions as moot.
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