Bolton v. Inland Fresh Seafood Corp. of America, Inc., No. 24-10084, __ F. 4th __, 2026 WL 3056461 (11th Cir. Oct. 13, 2026) (en banc, opinion by Circuit Judge Adalberto J. Jordan)
This week’s notable decision comes from the Eleventh Circuit, which issued this en banc ruling addressing whether ERISA requires exhaustion of statutory claims. In our October 22, 2025, edition we covered the panel decision in this case (which was the case of the week) with the headline, “Statutory Claims in the Eleventh Circuit: The Beginning of the End for Exhaustion?” This week we found out that the answer to this question, as the title of this post gives away, was “yes.”
As a refresher, the dispute in this case arose from a leveraged employee stock ownership plan transaction. In November 2016, the Inland Fresh Seafood Corporation of America plan used the proceeds of a $92 million loan, guaranteed by Inland Fresh, to buy all of the company’s outstanding common stock from four of its officers and directors. Five former employees sued on behalf of the plan and a proposed class of its 578 participants, alleging that the price was inflated by false financial projections and far exceeded fair market value.
The employees named as defendants Inland Fresh, the plan’s committee, its trustee, and four officers and directors, and asserted under ERISA § 502(a)(2) and (a)(3) that defendants breached their fiduciary duties by causing the plan to overpay by tens of millions of dollars. They also alleged that the trustee failed to conduct proper due diligence.
Defendants moved to dismiss, arguing that plaintiffs were required to exhaust administrative remedies, they had not done so, and the deadline for doing so had long since passed. Plaintiffs argued that exhaustion was unnecessary and, alternatively, that the case should be stayed so that they could pursue it.
The Northern District of Georgia granted defendants’ motion to dismiss and denied a stay, ruling that it was bound by the Eleventh Circuit’s 1985 decision in Mason v. Continental Group, Inc., which imposed a mandatory administrative exhaustion requirement on statutory ERISA claims, including claims for breach of fiduciary duty. “That the Eleventh Circuit may be unique in requiring exhaustion of administrative remedies prior to filing suit,” the court wrote, “does not justify ignoring the requirement.”
Plaintiffs appealed, and a three-judge panel including Judges Adalberto J. Jordan and Jill Pryor affirmed. (The third judge was district judge Federico A. Moreno, sitting by designation.) The panel, like the district court, held that it was bound by Mason. However, Judge Jordan, joined by Judge Pryor, penned a concurrence in which the two called for the Circuit to reconsider Mason. The full court agreed to do so; it vacated the panel opinion, granted rehearing en banc, and the Department of Labor weighed in with an amicus brief.
Judge Jordan wrote the en banc opinion as well, and repeated many of the same concerns he had raised in his concurrence. The opinion unsurprisingly began with the text of ERISA, which contains no exhaustion requirement for statutory claims. Mason had acknowledged this, but justified its rule on policy grounds, namely that administrative procedures reduce frivolous suits, minimize costs, and allow plan trustees to do their jobs without “premature judicial intervention.”
However, the en banc court stated, “Whatever merits these and other policy arguments may have…it is not [our] province…to rewrite the statute to accommodate them.” The court noted that the Supreme Court (in Jones v. Bock, a Prison Litigation Reform Act case) had held that “crafting and imposing” exhaustion rules that “are not required” by statutory text “exceeds the proper limits on the judicial role.” Although Jones did not necessarily abrogate Mason under the circuit’s “strict abrogation standard,” it nevertheless demonstrated that “Mason erred in relying on policy considerations to create an atextual exhaustion requirement for statutory claims under ERISA.”
Next, the en banc court noted, as the district court and panel decision did before it, that Mason stood nearly alone. Seven circuits (the Third, Fourth, Fifth, Sixth, Ninth, Tenth, and D.C.) hold that plaintiffs asserting statutory ERISA claims need not exhaust them. Only the Seventh Circuit has a similar rule, but its rule is discretionary rather than mandatory. “So we stand alone in requiring mandatory exhaustion for fiduciary-breach and statutory claims under ERISA.”
Secondary authorities also supported the majority position. These observed that “neither the text nor the legislative history of ERISA indicates that Congress intended to require exhaustion for statutory claims,” and noted that suits alleging breach of fiduciary duty “involve statutory application rather than plan interpretation,” and thus administrators’ expertise “would be of little or no assistance to a reviewing court.”
Of course, overturning a decades-old precedent is not done easily, and thus the court was forced to tangle with stare decisis. Defendants urged the court not to “discard forty years of predictability.” The court thus considered four factors in determining whether Mason should be rejected: “the quality of the decision’s reasoning; its consistency with related decisions; legal developments since the decision; and reliance on the decision.”
The court concluded that all four factors “weigh heavily in favor of overruling Mason and its progeny[.]” On the first factor, the court found Mason “to be wanting” (with a cheeky citation to “A Knight’s Tale (Columbia Pictures 2001)”) for the reasons set forth above. On the second and third factors, the court stated that defendants “do not meaningfully grapple with the decisions of our sister circuits.” Defendants contended that ERISA’s silence gives courts discretion to require exhaustion, but the court disagreed. ERISA promises “ready access to the [f]ederal courts,” exhaustion delays that access, and fiduciaries accused of malfeasance “may well have a conflict of interest” in reviewing complaints against themselves. Nor did Congress’s inaction in “correcting” Mason impress the court, given the “whopping” 7-1-1 circuit split.
Finally, any reliance interests were “likely minimal. Although Mason added a procedural hurdle to litigation by grafting an exhaustion requirement onto ERISA, it did not alter the nature of available claims brought, duties owed, and remedies authorized under ERISA itself.”
Next, the court discussed how to apply the circuit’s new rule, with defendants requesting that it only be used prospectively. However, “we see no reason here to depart from the ‘normal rule of retroactive application.’” Even assuming the decision announced a new principle of law, the court determined that retroactivity furthers ERISA’s goal of “ready access to the federal courts,” and would not be inequitable, because the plan did not require exhaustion and the ruling did not expand liability for statutory claims.
Finally, the court turned to the issue of whether a benefit plan itself can mandate exhaustion even if ERISA does not require it. Here, the court was able to dodge the issue “because we conclude that the plan here does not mandate exhaustion for statutory ERISA claims.” Section 8.10 provided that a participant “need not file a claim” but “may submit a written claim,” and the court concluded that “may” in this context was “permissive, not mandatory.”
The court acknowledged that the district court and the panel had ruled otherwise, but those rulings “were rendered in the context of a different ERISA world” governed by Mason, under which such language was treated as merely reciting participants’ general rights under ERISA. “Having now overruled Mason to the extent discussed, we do not need to read the plan language with a Mason gloss.” The court also found its interpretation supported by the summary plan description, which told participants that they “may file suit in a federal court” in the event of a fiduciary breach. The Department of Labor, in its amicus brief, agreed that the plan’s internal review process was “voluntary, not mandatory.”
As a result, Mason is no more, and the Eleventh Circuit has now joined the lopsided majority of courts holding that ERISA does not mandate exhaustion for statutory claims, including claims for breach of fiduciary duty.
The ruling, of course, raises a host of questions. First, in a footnote the court emphasized that it was only addressing statutory claims and was not disturbing “our cases requiring exhaustion in cases where a plaintiff is challenging the denial of benefits under the terms of a plan governed by ERISA.” However, several of the arguments employed by the court regarding statutory claims apply equally to benefit claims. For example, if ERISA contains no language mandating exhaustion, why should exhaustion be required in any case arising under ERISA, regardless of how it is alleged? (Judge Thapar of the Sixth Circuit wondered this in his concurrence in Wallace v. Oakwood Healthcare, Inc., Your ERISA Watch’s case of the week in our April 8, 2020, edition.)
Second, the line between statutory claims and claims for benefits now carries more weight, since only the former escape exhaustion. How will the Eleventh Circuit decide which claims fall on which side of that line? Plaintiffs may now try to recharacterize benefit claims as breach of fiduciary duty claims in order to avoid exhaustion requirements, and courts in the circuit will have to determine how much creativity is allowed.
Third, while the court did not decide whether a plan is allowed to require exhaustion of statutory claims, it read ordinary permissive language (such as “need not” and “may”) as insufficient. Can plans include language requiring exhaustion in order to get around this decision? Does this decision also call into question benefit claim cases in which “may” is frequently read as “must” in the exhaustion context? (Notably, the Department of Labor signaled at oral argument that it would be skeptical of any efforts to circumvent the ruling: “[W]e don’t believe that…plaintiffs or employers should be able to contract away or force their employees to contract away their rights under ERISA.”)
As a result, while the outcome of this dispute was fairly straightforward, the consequences could be far-reaching for all types of cases under ERISA, in the Eleventh Circuit and elsewhere. Stay tuned for further developments!
Below is a summary of this past week’s notable ERISA decisions by subject matter and jurisdiction.
Arbitration
Third Circuit
The Kraft Heinz Co. v. International Brotherhood of Teamsters Local Union 355, No. 24-580-GBW, 2026 WL 3071711 (D. Del. Oct. 14, 2026) (Judge Gregory B. Williams). Kraft Heinz operates a facility in Delaware where certain hourly employees are represented by Teamsters Local 355 and covered by a collective bargaining agreement (CBA). In 2023, Local 355 filed a grievance under the CBA on behalf of a former employee, claiming that Kraft Heinz had denied her, and similarly situated individuals, participation in a company-sponsored ERISA-governed retiree health plan in violation of the CBA. When the grievance went unresolved, Local 355 filed an arbitration demand. Kraft Heinz refused to arbitrate, asserting that the grievance was not arbitrable under the CBA. Kraft Heinz then brought this action in 2024, seeking preliminary and permanent injunctive and declaratory relief barring arbitration. Local 355 answered with a counterclaim to compel arbitration but consented to the preliminary injunction. In November 2025, the parties agreed to resolve the case on cross-motions for summary judgment; this order was the result. The court noted that “[a]rbitration is the preferred method for resolving disputes between a union and an employer,” and a presumption of arbitrability applies unless it can be said “with positive assurance” that the clause cannot be read to cover the dispute. The court used a three-step approach, asking (1) does the dispute fall within the scope of the arbitration clause, (2) does another contract provision expressly exclude arbitration, and, if not, (3) is there any other “forceful evidence” of an intent to exclude it. On scope, the court found the arbitration clause quite broad, covering differences “concerning the meaning, application or interpretation of specific provisions of this Agreement.” Because the CBA expressly addressed post-retirement benefits, the presumption of arbitrability applied. The court rejected Kraft Heinz’s argument that eligibility was governed by the retiree benefit plan rather than the CBA, reasoning that this “conflates the question of whether the arbitration clause’s scope is broad, with whether the issue of eligibility is excluded vis-à-vis other language in the contract or external evidence.” However, on step two, the court ruled that the presumption was overcome by other language in the CBA. Section 26(K), titled “Plan Documents Govern,” provided that the extent of coverage under all benefit programs is governed by the applicable policies and plan documents and that “[a]ny questions or disputes concerning any benefit programs will be resolved in accordance with the terms and conditions set forth in the applicable insurance policies or plan documents.” Local 355 argued that the provision addressed the “extent of coverage,” not eligibility, but the court disagreed: the language “evinces a clear intent to expressly exclude disputes over post-retirement benefits” from the arbitration procedures, and it found “no reason to read eligibility grievances out of such a broadly worded provision.” The plan documents further supported the court’s ruling because they gave the plan administrator “complete discretionary authority to interpret and construe the terms of the Plan,” including eligibility for it, and set out a procedure for eligibility disputes that did not include arbitration. As a result, the dispute at issue was not arbitrable. The court cautioned that ERISA-governed benefits are not categorically excluded from arbitration, and that without explicit language pointing to alternative procedures a broad clause may apply. But “when there are clear indications that the parties intended for separate procedures to govern benefits grievances, as here, a CBA’s arbitration provision cannot override that intent.” As for a remedy, the court agreed with Kraft Heinz that a permanent injunction was appropriate. Under Third Circuit authority, a party forced to arbitrate a matter it did not agree to arbitrate is “irreparably harmed as a matter of law,” and Kraft Heinz had no adequate remedy at law. Furthermore, Local 355 offered no evidence of hardship from being required to follow the plan’s procedures. Finally, while public policy strongly favors arbitration, it only does so when “the specific dispute falls within the scope of the clause.” As a result, the court granted Kraft Heinz’s motion for summary judgment and will enter injunctive relief enjoining Local 355 from arbitrating disputes over eligibility for post-retirement benefits.
Breach of Fiduciary Duty
First Circuit
Taylor v. BDO USA, P.C., No. 25-cv-10128-DJC, 2026 WL 3120806 (D. Mass. Oct. 19, 2026) (Judge Denise J. Casper). In 2023, the giant accounting firm BDO USA established an employee stock ownership plan that purchased 42% of BDO’s stock for roughly $100 per share, or $1,242,025,992. BDO financed the deal with a loan from Apollo Global Management affiliates (the “Apollo Loan”) carrying an 11.36% interest rate and then lent the proceeds to the ESOP through a separate loan (the “BDO Loan”). State Street Global Advisors Trust Company served as the ESOP’s independent trustee for the transaction and approved the terms. Afterward, the board replaced State Street with a committee of BDO insiders. Tristin Taylor, a BDO employee since 2019 who is 20% vested in his ESOP account, sued BDO, its board, and the individual trustees. He asserted prohibited transaction claims under ERISA § 406(a) and (b), a claim that BDO and the board failed to monitor State Street under § 404(a), and a co-fiduciary claim under § 405(a). He alleged that the ESOP overpaid because BDO’s revenue included client “credits,” declining audit performance and oversight scrutiny were hidden from State Street, the price carried no discount for lack of control, the financing was unreasonably costly, and certain shareholders received warrants at $59 per share. Last year Judge Richard G. Stearns dismissed Taylor’s complaint without prejudice, finding that Taylor pointed “to no instance in which a tangible loss of value was actually incurred” and had not plausibly alleged overpayment or that State Street failed to consider the facts he cited. (Your ERISA Watch covered this ruling in our August 27, 2025, edition.) Taylor amended his complaint to add allegations about State Street, after which Judge Stearns recused himself. Now in front of Judge Casper, defendants again moved to dismiss. The court addressed jurisdiction first and weighed Taylor’s two theories of injury. One was that the Apollo Loan’s excessive interest reduced the shares allocated to his account by at least ten shares, or $650. The other was that overvaluation reduced his allocation by at least seven shares, or $450. On the Apollo Loan theory, the court noted that the ESOP document defined an “Exempt Loan” as a loan made to the ESOP by a “Disqualified Person” and releases shares for allocation as the Exempt Loan is paid. The BDO Loan, not the Apollo Loan, fit that definition. Furthermore, the credit agreement governing the BDO Loan set its interest rate at only 3.96%. The court found it “difficult…to follow” how the Apollo Loan’s rate led to fewer shares in Taylor’s account. His broader argument that the loan strained BDO’s finances was too generalized to rescue him; BDO’s incurred “$42 million” in interest expenses was “a line item with neither label nor explanation as to its provenance.” In short, Taylor’s claims were “undercut by the record” and the court could not identify a tangible loss traceable to the Apollo Loan. On Taylor’s overpayment theory, the court found that he offered “no factual suggestion” that State Street lacked qualifications or failed to perform due diligence. The amended complaint added allegations that State Street was absent from the emergency meeting approving the deal and was given inflated earnings and incomplete oversight information. But State Street’s valuation relied on “other things,” and Taylor said nothing about the sufficiency of its process. The court agreed that hiring an independent trustee “is not a whitewash,” but distinguished Taylor’s authorities by noting that this was not a case in which the expert did not know the valuation’s purpose, valued the wrong entity, or never considered the transaction. The court also distinguished various other ESOP standing decisions Taylor cited. In each, the trustee that approved the transaction was a defendant, whereas State Street was not named here. Allegations that defendants fed State Street faulty information “do not support the next inference necessary to establish overpayment, i.e., that State Street’s ability to value BDO was so compromised as to be unreasonable, or above fair market value, regardless of their own good faith and due diligence.” Taylor thus had not plausibly alleged that State Street’s valuation “was unreasonable, made in bad faith, or otherwise in breach of their fiduciary duties, so as to constitute an overpayment.” The court thus granted defendants’ motion to dismiss with prejudice.
Sixth Circuit
Watt v. FedEx Corp., No. 2:23-cv-02593-TLP-atc, 2026 WL 3084150 (W.D. Tenn. Oct. 15, 2026) (Judge Thomas L. Parker). Five retired FedEx pilots sued FedEx Corporation, the FedEx Corporation Employees’ Pension Plan, the Retirement Plan Investment Board of FedEx Corporation, and its individual members in this putative class action. The plan is a defined benefit plan that offers 50%, 75%, and 100% joint and survivor annuities (JSAs), with the 50% JSA as the default. Plaintiffs allege that the plan’s JSAs are not “actuarially equivalent” to single life annuities (SLAs), in violation of ERISA § 1055(d), because the plan uses outdated mortality tables and an improper interest rate. Each named plaintiff retired after normal retirement age and alleged a monthly shortfall measured against the SLA payable at his annuity starting date. Plaintiffs’ original operative complaint was dismissed by the district court on the ground that they had failed to allege that using the relevant mortality table violated ERISA’s actuarial equivalence requirement. Earlier this year, the Sixth Circuit reversed this ruling in a published decision, Reichert v. Kellogg Co. (resolving the same issue in suits involving Kellogg and FedEx), which held that § 1055(d) “prohibits employers from using unreasonable, inappropriate actuarial assumptions.” The appellate court did not reach FedEx’s “two additional grounds for dismissal,” which the district court had not considered, and remanded for the district court to address them in the first instance. (For more information, check out our March 25, 2026 coverage, in which Reichert was the case of the week.) Now the case is back in district court, where defendants filed a renewed motion to dismiss. (Their concurrent motion to stay discovery was denied.) Defendants argued: (1) plaintiffs “did not show that the benefits they received were less than the ‘actuarial equivalent’ of their ‘accrued benefits’”; (2) three of the plaintiffs elected 100% JSAs, and these options were not covered by § 1055(d)’s requirements; and (3) defendants did not breach any fiduciary duty. On the first argument, defendants contended that “accrued benefit” means the annual benefit payable at “normal retirement age,” so plaintiffs had to allege that their JSAs were worth less than that benefit. Defendants also invoked § 1055(g), which looks at the “normal retirement age” in calculating lump sums. Plaintiffs responded that they retired after normal retirement age and appropriately compared their JSAs to the larger SLAs payable at their actual annuity starting dates. The court sided with plaintiffs. They had pleaded outdated actuarial assumptions and specific dollar shortfalls, which was enough under Reichert. Furthermore, Section 1002(23)(A) defines “accrued benefit” “except as provided in section 1054(c)(3),” and that exception reaches benefits other than an annual benefit commencing at normal retirement age. Citing Sixth Circuit authority, the court explained that an accrued benefit paid at another time “must be worth at least as much as” the normal retirement age annuity. The § 1055(g) argument fared no better because it did “not address the issue here.” The court also found defendants’ arguments about subsidized early or late benefits beside the point, because plaintiffs retired late and the larger SLA simply reflected the same aggregate value spread over fewer months. Defendants’ second argument was that three plaintiffs elected 100% JSAs, which was not “the QJSA” because the plan designates the 50% JSA as the appropriate QJSA. The court held that this argument “rests on a thin reed,” stating that nothing in the statute’s reference to “an annuity” limits a plan to a single QJSA. The court found that a plan can have more than one QJSA and defendants’ narrower reading would risk stripping ERISA’s protections from participants who choose a non-default option. Thus, a 100% JSA “comfortably satisf[ies]” § 1055(d)(1). Finally, the court rejected defendants’ challenge to plaintiffs’ breach of fiduciary duty claims. Because the claims were derivative and Reichert had already held that plaintiffs plausibly alleged violations of § 1055 and breach of fiduciary duty, the claims survived on that basis alone. The court nonetheless independently found plaintiffs’ claim sufficiently pleaded because defendants were, at a minimum, functional fiduciaries, and plaintiffs alleged that their actions “unlawfully caused participants and beneficiaries not to receive required actuarially equivalent benefits and to lose vested benefits,” to the tune of “millions of dollars.” The court thus denied defendants’ motion to dismiss.
Tenth Circuit
Harrison v. Envision Management Holding, Inc. Board of Directors, No. 1:21-cv-00304-CNS-MDB, 2026 WL 3059499 (D. Colo. Oct. 2, 2026) (Judge Charlotte N. Sweeney). This is a five-year-old certified class action that has already been up to the Tenth Circuit and back. (For more about that trip, see our February 15, 2023, edition.) The plaintiffs are participants in the Envision Management Holding, Inc. employee stock ownership plan, and the defendants include Envision’s board of directors, the plan’s committee, Argent Trust Company, and several individuals. Plaintiffs allege that the plan overpaid by at least $23.4 million for the Envision stock it purchased from the sellers, thus violating ERISA’s prohibited transaction provisions, among others. With a bench trial approaching, the parties filed a “Joint Statement of Trial Issues” seeking clarification of the burden allocations for the prohibited transaction claims. The court first addressed defendants’ argument that “failure to show overpayment dooms Plaintiffs’ claims as a standing matter.” The court disagreed, holding that defendants “conflate[d]” whether plaintiffs must prove overpayment as an element on the merits with whether they have alleged an injury sufficient to bring their claims at all. Those inquiries are “distinct,” and thus the court “decline[d] Defendants’ invitation to import an issue that attends the merits of Plaintiffs’ claims into the Court’s analysis of Plaintiffs’ standing.” Plaintiffs plausibly alleged an overpayment injury of at least $23.4 million in their complaint, and standing is assessed as of the time an action is brought. Thus, plaintiffs “identif[ied] an injury” that satisfied the Supreme Court’s test in Cunningham v. Cornell Univ., and “dismissal of their claims on the eve of trial is improper.” On the merits, the parties did not dispute that plaintiffs bear the burden on the three elements of a § 1106(a)(1)(C) claim, or that the burden would shift to Argent to prove that an exemption under § 1108 applies. However, defendants argued that plaintiffs must additionally prove causation of loss under § 502(a)(2) and entitlement to appropriate equitable relief under § 502(a)(3) before the burden shifts. The court rejected this as well, noting that “[n]umerous cases have rejected, explicitly or implicitly, this argument… Fundamentally, ‘requiring such a causal link would be contrary to Congress’s creation of per se violations under § 406.’” Defendants relied on a Tenth Circuit decision (Pioneer Centres Holding Co. Emp. Stock Ownership Plan & Tr. v. Alerus Fin., N.A.) which placed the burden of proving causation on the plaintiff in a breach of fiduciary duty claim. The court was not persuaded, however, noting that Pioneer Centres involved claims under § 1104 rather than prohibited transaction claims under § 1106, and in any event “Cunningham ultimately controls.” Furthermore, “where the Tenth Circuit has considered prohibited transactions claims, it has resisted precisely the causation requirement that Pioneer Centres imposes on breach of fiduciary claims.” Finally, the court rejected defendants’ argument that Cunningham only addressed pleading issues and did not provide “broader instruction as to what Plaintiffs must prove at trial.” The court discerned “no such limitation,” and approvingly cited the recently-decided Bowers v. Russell (covered in our June 3, 2026, edition), which applied Cunningham in analyzing evidence after a twelve-day bench trial. Thus, defendants’ attempts to throw up roadblocks were all rejected, and the case remains on track for trial.
Discovery
First Circuit
Hannon v. Guardian Life Ins. Co. of Am., No. 25-13431-LTS, 2026 WL 3093200 (D. Mass. Oct. 16, 2026) (Judge Leo T. Sorokin). Thomas Hannon sued Guardian Life Insurance Company of America under state law arising from Guardian’s reduction and eventual termination of his disability benefit payments. At Guardian’s request, the court bifurcated the case. Phase I concerns whether ERISA preempts Hannon’s state law claims, and the court set a schedule allowing roughly three months of “wide-ranging” discovery on that issue without limitations. At the outset of that period, Guardian produced its claim file and served initial disclosures under Federal Rule of Civil Procedure 26(a)(1) stating that it “refers to the individuals identified in the claim file previously produced” and that its employees “may be contacted through counsel for Guardian.” Guardian later filed its brief on ERISA preemption and attached a declaration from its employee Anne Albrecht describing the formation of the policy at issue. Hannon moved to strike the declaration under Rule 37 or, alternatively, for leave to depose Albrecht and obtain the documents she relied on in preparing it. He contended that Guardian’s initial disclosures violated Rule 26(a) by failing to identify Albrecht and the subjects of her knowledge. As a threshold matter, the court noted that it was unclear whether initial disclosures were required at all, given Rule 26’s exemption for any “action for review on an administrative record,” a point the parties disputed. It assumed that they were, because the court had not yet resolved whether ERISA preempts Hannon’s state law claims. The court agreed with Hannon that Guardian’s disclosure was deficient, as Rule 26(a)(1)(A)(i) requires both the name of each individual likely to have discoverable information and the subject of that information, and Guardian “failed to disclose the subject of the information that Albrecht – or any other individual named in the claim file – possessed.” However, in response Hannon “took no action whatsoever.” He never moved to compel a fuller disclosure, and the deadline under the court’s scheduling order had “long passed.” He also had served no discovery. Guardian, by contrast, deposed the president of Hannon’s employer, the State Police Association of Massachusetts, and obtained and shared the Association’s documents, more than half of which named Albrecht in their titles. Hannon, the court wrote, “now (and only now) cries foul.” As a result, the court rendered three rulings. First, it declined to exclude Albrecht’s declaration under Rule 37(c)(1). Hannon was on notice as to Albrecht’s role and knowledge and was therefore not prejudiced by Guardian’s failure to list her or her topics. Second, the court refused to allow Albrecht’s deposition. Hannon “essentially asks for the opportunity to await Guardian’s brief on ERISA preemption, evaluate its legal and factual arguments, and only then seek a deposition of Albrecht – after declining to do so during the fact discovery period the Court established for Phase I.” According to the court, “[t]hat is neither fair nor proper.” Third, although the court preferred “resolution of cases on the merits,” that preference “does not support allowing the deposition of Albrecht in the present factual circumstances, where Hannon understood the focus of Phase I discovery, learned of Albrecht’s identity and role, took no discovery whatsoever, and awaited the filing of Guardian’s brief on ERISA preemption before seeking a deposition.” As a result, the court mostly denied Albrecht’s motion to strike, although it did require Guardian to disclose the documents Albrecht relied on in preparing her declaration, to the extent not already identified and produced.
Life Insurance & AD&D Benefit Claims
Sixth Circuit
Thomas v. UACJ Automotive Whitehall Industries, Inc., No. 1:25-cv-944, 2026 WL 3056814 (W.D. Mich. Oct. 13, 2026) (Judge Hala Y. Jarbou). In this action Nolan Thomas seeks $250,000 in death benefits under an ERISA-governed voluntary life insurance plan. His late husband, Andre Thomas, worked for UACJ Automotive Whitehall Industries, Inc. and was a participant in the plan, which was insured by United of Omaha. Voluntary coverage under the plan ranged from $5,000 to $300,000 but could not exceed “5 times [] Annual Earnings, rounded to the next higher multiple of $5,000,” and coverage above $100,000 required an “evidence of insurability” form. Andre signed up for $300,000 in coverage, which exceeded the maximum for which he was eligible. For ten weeks beginning January 6, 2023, UACJ withheld premiums consistent with $300,000 in coverage from Andre’s paycheck, but it never confirmed his election or told him he was ineligible for the maximum. Andre died on March 6, 2023. UACJ “stopped responding” to Thomas’s inquiries, and United of Omaha closed his claim because he could not obtain UACJ’s signature on the relevant form. Subpoenas to UACJ in 2024 allegedly went unanswered. After UACJ finally sent the form in 2025, United of Omaha reopened the claim and paid Thomas $50,000 under the voluntary plan. Thomas sued UACJ under ERISA § 502(a)(3) for breach of fiduciary duty. After UACJ failed to answer, the court denied default judgment because no equitable remedy authorized monetary relief from UACJ’s general assets and because UACJ could not be made to disgorge premium overpayments it had passed on to United of Omaha. Thomas thus filed an amended complaint against UACJ, replacing the (a)(3) claim with a § 502(a)(1)(B) claim for the outstanding $250,000 and a § 502(c) claim for penalties based on UACJ’s failure to respond to his document requests. UACJ defaulted again, so Thomas renewed his motion for default judgment. On the benefits claim, the court found that the plan schedule and summary plan description did not support Thomas. Both capped coverage at five times salary, and Andre never submitted the proof of insurability required above $100,000. Next, the court addressed equitable estoppel, but the court was unsure whether this cause of action arose under § 502(a)(1)(B) or § 502(a)(3). The Sixth Circuit did not clarify the statutory basis in Sprague v. General Motors Corp., but in Pearce v. Chrysler Group LLC Pension Plan it suggested that (a)(3) is the proper vehicle. The court declined to wade “deeply into this morass” because either way Thomas had not alleged that UACJ intended to mislead Andre. “The unfortunate reality is that the voluntary plan unambiguously forecloses Andre’s eligibility for the maximum life insurance coverage. Plaintiff understandably focuses on UACJ’s omissions and misrepresentations, but they do not create a ‘plan’ for purposes of relief under § 502(a)(1)(B). Therefore, no recovery is available to him.” Thomas’s alternative due process theory fared no better, because the court stated that a substantive remedy cannot rest solely on a procedural violation, and any “dearth of process” was Thomas’s own doing. The plan set out a clear appeal procedure, but he “ignored the claims appeal process and instead chose to file this action… Having not followed the voluntary plan’s established procedures, Plaintiff is in no position to argue today that they were inadequate.” Finally, the court addressed Thomas’s § 502(c) claim. The court found that Thomas’s request for documents reasonably swept in the plan and summary plan description, and the court considered it a “colorable” demand because UACJ could have asked for clarification and knew why Thomas wanted the information. However, Thomas’s pleadings were inconsistent about whether UACJ ever responded, and he never explained how he eventually came to possess the plan and summary plan description, which “comprehensively lay out the terms and conditions of the voluntary plan.” Nor did he allege prejudice, a “logical concern” in imposing penalties that asks whether the claimant is “in a worse position because of [the] delays.” As a result, “Given the apparent lack of articulated purpose for the document requests combined with the absence of prejudice, the Court declines to award statutory penalties.” As a result, Thomas’s motion for default judgment against UACJ was denied in its entirety.
Medical Benefit Claims
Seventh Circuit
E.M. v. Blue Cross & Blue Shield of Ill., No. 25 C 14849, 2026 WL 3121299 (N.D. Ill. Oct. 19, 2026) (Judge Jorge Alonso). E.M., a participant in an ERISA-governed health plan administered by Blue Cross and Blue Shield of Illinois, and E.M.’s child K.M. sued after BCBS denied full coverage for roughly ten weeks of treatment K.M. received for mental health and substance abuse problems at Open Sky Wilderness Therapy. The denial left plaintiffs $48,000 out of pocket. The plan covers “Mental Illness and/or Substance Use Disorder” and provides benefits for treatment in a “Residential Treatment Center” (RTC), which the summary plan description (SPD) defines as a licensed facility offering a defined course of therapeutic intervention in a controlled environment. The definition, however, excludes “wilderness programs” and “other facilities that provide primarily a supportive environment and address long-term social needs, even if counseling is provided in such facilities.” A separate exclusion bars “[b]ehavioral health services provided at” behavioral modification facilities, boot camps, and “wilderness programs,” among others, “except for Covered Services provided by an appropriate Provider as defined in this Certificate.” Plaintiffs asserted a claim for benefits under ERISA § 502(a)(1)(B) and a claim for equitable relief under § 502(a)(3) based on a violation of the Mental Health Parity and Addiction Equity Act (Parity Act), 29 U.S.C. § 1185a. BCBS moved to dismiss both claims for failure to state a claim. On the benefits claim, BCBS first argued that Open Sky did not fall within the exclusion’s “appropriate Provider” exception because the SPD’s definition of “Professional Provider” is limited to individual practitioners. The court was “not clear why” BCBS was importing that term into an exception that refers only to a “Provider,” a term the SPD defines broadly to include “any health care facility” or “entity.” BCBS’s reply brief shifted ground, arguing that the exception did not apply because K.M.’s stay did not provide “Covered Services,” since Open Sky is neither an RTC nor a “Behavioral Health Practitioner.” The court noted that plaintiffs had appeared to disclaim RTC status in their administrative appeal but now argued that Open Sky qualified as an RTC. BCBS countered that the RTC definition itself excludes wilderness programs, so reading the plan to cover a facility called “Open Sky Wilderness Therapy” would “swallow the exclusion.” The court was not convinced because that argument “does not fully account for what appears to be a proviso” in the RTC definition. The court read the language about a “supportive environment” and “long-term social needs” to mean that a facility providing a high “degree of security, supervision [and] structure,” as serious conditions requiring urgent attention might demand, is not subject to the exclusion. The court was not sure based on the pleadings whether Open Sky qualified. Plaintiffs alleged that K.M. received “intensive mental health treatment” for “severe” disorders at a facility providing an “intermediate” level of care, but “[t]here is little other information before the Court at this early stage.” BCBS countered with billing revenue codes, but the court lacked “the factual context it would need” to assign them significance. It was therefore at least plausible that the treatment exceeded a merely supportive level, and the question required factual development. As for BCBS’s argument based on the “Behavioral Health Practitioner” language, the court noted that, “Strangely, the SPD contains two definitions for ‘Professional Provider,’” and thus the term was ambiguous and could not be resolved at the pleading stage. BCBS’s motion to dismiss plaintiffs’ benefits claim was thus denied. Turning to the Parity Act, plaintiffs argued that the wilderness program exclusion is a nonquantitative treatment limitation based on “geographic location” or “facility type” with no counterpart for medical or surgical benefits. BCBS responded that the plan would not cover analogous alternative-setting medical services, such as camps for weight loss, diabetes, childhood cancer, or traumatic brain injuries, because they fall within a general exclusion for “services or supplies that are not specifically mentioned,” and that the wilderness exclusion is “of a piece” with the plan’s exclusion of custodial care at skilled nursing facilities. “These arguments are strained,” the court found. “It is inescapable that the plan language regarding wilderness programs, RTCs, etc., is substantially different from the plan language regarding skilled nursing, custodial care, etc.” Plaintiffs thus plausibly alleged that BCBS invoked the exclusion to deny coverage at an intermediate mental health facility while imposing no similar restriction on analogous skilled nursing services. The court ruled that, at this stage, “the relevant comparison is not whether benefits for wilderness therapy are available for medical/surgical patients, but rather whether the Plan has chosen to provide benefits for skilled nursing facilities and rehabilitation centers for medical/surgical patients, but chosen to deny benefits to those with mental health conditions who seek coverage for a residential treatment center offering wilderness therapy.” As a result, BCBS’s motion to dismiss was denied in full.
Pleading Issues & Procedure
Second Circuit
Konyukhova v. Walgreen Co., No. 1:24-cv-04390 (VEC) (SDA), 2026 WL 3078610 (S.D.N.Y. Oct. 15, 2026) (Magistrate Judge Stewart D. Aaron). Pro se plaintiff Esmiralda Konyukhova sued Walgreen Company, its disability plan and health and welfare plan, the welfare plan committee, and Sedgwick Claims Management Services, asserting a range of ERISA, Americans with Disabilities Act (ADA), and New York State Human Rights Law (NYSHRL) claims. On March 31, 2026, the court adopted the magistrate judge’s report and recommendation and dismissed with prejudice the claims against the Walgreen defendants for benefits under ERISA Section 502(a)(1)(B), under ERISA § 510, and for failure to engage in an interactive process under the ADA and the NYSHRL. The court also dismissed with prejudice every claim against Sedgwick except an ERISA § 502(a)(3) claim based on “incomplete or misleading communications regarding the terms of the Plan, her claim status, her benefits, and her requests.” Konyukhova was granted leave to amend only her NYSHRL retaliation claim. Meanwhile, her request to file an amended complaint seeking statutory penalties under ERISA § 502(c) was referred to the magistrate judge. (Your ERISA Watch covered this ruling in our April 8, 2026, edition.) Konyukhova then moved for leave to file an amended complaint which included the two claims she was allowed to bring pursuant to the court’s order. However, she also sought to assert a new claim under New York Labor Law § 215 and numerous claims that had previously been dismissed with prejudice. On August 18, 2026, the magistrate judge denied leave and directed that the case proceed on the remaining claims. Konyukhova moved for reconsideration and filed objections to the order. The magistrate stayed litigation on the objections while he addressed the reconsideration motion. The magistrate explained that under Federal Rule of Civil Procedure 60(a), reconsideration is available only if there is an intervening change of controlling law, new evidence, or the need to correct a clear error or prevent manifest injustice, and the standard is “strict.” The magistrate ruled that Konyukhova identified no oversight or omission warranting relief under Rule 60. Nor did she meet the reconsideration standard on any claim. She argued that the court overlooked her “documented complaints” in analyzing her NYSHRL retaliation claim, but “[t]his simply is not true” because the August 18 order expressly addressed those complaints, and she cited no overlooked controlling decisions. As for the § 502(c) claim, Konyukhova pointed to errors she believed the magistrate had made rather than “controlling decision or data” it had overlooked, and her reply papers asked the court “to correct the identified errors in its application of existing law.” Finding no clear error, the court explained that reconsideration “is not a substitute for [an] appeal.” Any asserted errors thus would have to be addressed by Judge Valerie E. Caproni, the assigned district court judge, in ruling on the objections. As for Konyukhova’s NYLL § 215 claim, it exceeded the scope of the leave the district court had granted her, and she raised no controlling decision overlooked in connection with that ruling. Finally, the magistrate wanted no part of Konyukhova’s request that the court certify issues for interlocutory appeal under 28 U.S.C. § 1292(b). That request “must be addressed to Judge Caproni, and not the undersigned.” Konyukhova’s motion for reconsideration was thus denied.
Remedies
Supreme Court
Aldridge v. Regions Bank, No. 25-590, __ S. Ct. __, 2026 WL 3053539 (U.S. Oct. 13, 2026). In this case former Ruby Tuesday managers who lost pension benefits under two unfunded top-hat plans when the company went bankrupt sued Regions Bank, which was the trustee of the rabbi trust that backed the plans. The managers asserted a claim under ERISA § 502(a)(3) seeking equitable surcharge, along with state law claims for breach of fiduciary duty, breach of trust, breach of contract, and negligence. The district court dismissed the state law claims as preempted by ERISA and granted summary judgment to Regions on the (a)(3) claim. The Sixth Circuit affirmed in July 2025. One of its rulings was unexceptional: it agreed that the state law claims were preempted. Its second ruling was more controversial. The Sixth Circuit “side[d] with the Fourth Circuit” (in Rose v. PSA Airlines, Inc.) in holding that equitable surcharge is unavailable as a remedy under ERISA § 502(a)(3). The court stated that (1) any discussion of surcharge by the Supreme Court in CIGNA Corp. v. Amara was dicta, (2) this dicta conflicted with a prior Supreme Court ruling, Mertens v. Hewitt Associates, (3) Sixth Circuit precedent had rejected surcharge against a breaching fiduciary before Amara, and (4) a subsequent Supreme Court decision, Montanile v. Board of Trustees, had “distanced” the Court from Amara’s dicta. (This decision was the case of the week in our July 23, 2025 edition.) The managers sought review from the Supreme Court, asking it to decide whether a beneficiary may seek surcharge under ERISA § 502(a)(3), and if surcharge is unavailable, whether a beneficiary “may pursue state-law claims…or whether these state-law claims are preempted, thereby leaving the beneficiary without a remedy under either federal or state law.” In support of their petition, the managers pointed to the circuit split on the issue, with the Second, Fifth, Seventh, Eighth, Ninth, and Eleventh Circuits permitting surcharge and the Fourth and Sixth Circuits now barring it. The federal government weighed in on the petition, arguing that this case was “a poor vehicle” for deciding the issue because “the top-hat plan at issue here differs in significant respects from typical ERISA plans, and the defendant in this case is not subject to ERISA’s fiduciary provisions.” In this order the Supreme Court denied the petition without comment, leaving the Sixth Circuit’s decision, and the circuit split, in place. The battle over equitable surcharge will thus have to be fought another day.
Severance Benefit Claims
Third Circuit
Isaacs v. Novartis Pharmaceuticals Corp., No. 25-13626 (GC) (JBD), 2026 WL 3082705 (D.N.J. Oct. 15, 2026) (Judge Georgette Castner). Andrew Isaacs was hired by Novartis Pharmaceuticals Corporation in 2020 as Chief of Staff, Commercial Acceleration, and was promoted twice. In this action he alleges that he received “outstanding” performance reviews, but that three employees filed complaints about comments he made between 2021 and 2023, each of which Novartis found unsubstantiated and dismissed. He received a final warning in January 2024 “purportedly based on the prior complaints,” and on June 3, 2024, after a fourth employee complained, Novartis terminated him for cause due to misconduct. Isaacs alleged that he was given no “meaningful opportunity” to challenge the complaints, that he was told only his manager could appeal and that his manager declined, and that Novartis told him “there was ‘no process’ to challenge the ‘for cause’ nature of his termination.” He claimed that his employment terms and the company’s severance policy entitled him to a severance package worth just over $1 million, consisting of nine months of pay, a cash bonus for 2024, and unvested stock options. Isaacs brought his suit in state court, asserting breach of contract, quantum meruit, unjust enrichment, and a violation of the New Jersey Wage Payment Law. Novartis removed based on ERISA preemption. The parties then filed dueling motions: Isaacs moved to remand while Novartis moved to dismiss. In this order the court first addressed preemption because it was the basis for jurisdiction, noting that it was Novartis’ burden to establish jurisdiction. Isaacs did not dispute that Novartis’s severance pay plan was governed by ERISA, so the question was whether he was a participant or beneficiary with a “colorable claim” to vested benefits, a burden “less exacting than that needed to establish a likelihood of success on the merits.” Despite the low bar, the court held that Isaacs had no colorable claim. The plan’s “Exclusions from Eligibility” provision makes an employee ineligible for severance pay if terminated “for poor performance which, in the opinion of the company, was…misconduct.” According to the court, then, “by the plain language of the Plan, when Defendant terminates an employee and identifies the cause as poor performance due to misconduct, the terminated employee is ineligible for the Plan’s benefits.” Although Isaacs disputed the grounds for his termination, he did not allege that he used the plan’s appeal process, which required a written application to the plan administrator within 90 days of termination, and alleged instead that he was told “there was no process to challenge” his termination. Novartis argued that Isaacs was a participant because he “may become eligible to receive a benefit,” he did not need to show “a present, undisputed right to payment,” and that the jurisdictional question is whether he can assert a “non-frivolous claim.” The court rejected this. It acknowledged that the “colorable claim” standard is lower than “likelihood of success on the merits,” but “the Court disagrees with Defendant’s assertion that a finding that Plaintiff has asserted a ‘non-frivolous claim’ is sufficient to find the claims preempted by ERISA.” In the end, Isaacs did not have a colorable claim based on the plan’s plain language, which rendered him a non-participant. The court thus granted Isaacs’s motion to remand and denied Novartis’s motion to dismiss as moot.
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