ERISA litigation / Jayne E. Zanglein, Lawrence A. Frolik, Susan J. Stabile.
2011
KF3512 .Z36 2011 (Map It)
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Details
Author
Title
ERISA litigation / Jayne E. Zanglein, Lawrence A. Frolik, Susan J. Stabile.
Published
Arlington, VA : BNA Books, [2011]
Copyright
©2011
Call Number
KF3512 .Z36 2011
Edition
Fourth edition.
ISBN
9781570189685 (hardcover)
1570189684 (hardcover)
1570189684 (hardcover)
Description
xlvii, 1,480 pages ; 26 cm
System Control No.
(OCoLC)761383922
Bibliography, etc. Note
Includes bibliographical references and index.
Record Appears in
Added Author
Table of Contents
Preface
xi
Summary Table of Contents
xiii
Introduction
xlix
pt. I
Erisa Litigation Procedure
ch. 1
Is an ERISA Welfare Plan Involved?
3
I.
Overview
4
II.
Statutory Language
5
Erisa Section 3(1), Definition of Welfare Plan
5
Erisa Section 3(3), Definition of Plan
6
Labor Management Relations Act Section 302(c), Restrictions on [Payments to Employee Representatives]: Exceptions
6
III.
Definition of Welfare Plan
8
A.
How to Determine Whether ERISA Governs a Welfare Plan
8
1.
Is It a "Plan, Fund, or Program"?
9
a.
A Plan, Defined and Construed
9
b.
The Writing Requirement
10
c.
An Ongoing Administrative Scheme
16
2.
Is the Plan "Established or Maintained" by an Employer or Employee Organization?
22
a.
In General
22
b.
Bare Purchases of Insurance and Reimbursement of Insurance Premiums
24
c.
Intent to Establish Plan
25
3.
Is the Benefit Provided by an Employer or Employee Organization?
25
a.
In General
25
b.
MEWAs and Commercial Products
27
4.
Is the Purpose of the Plan to Provide an Enumerated Benefit?
28
a.
In General
28
b.
A Plan Within a Plan
30
5.
Are the Benefits Provided to Participants and Beneficiaries?
32
a.
Are Employees Involved?
33
b.
Plans With No Employees
37
c.
Plans With One Employee
38
d.
Owner and Spouse
38
e.
Dual Status Employees
39
B.
Is the Welfare Plan Excluded Under DOL Regulations?
42
1.
Payroll Practices
42
2.
On-Premises Facilities
45
3.
Holiday Gifts
45
4.
Sales to Employees
45
a.
In General
45
b.
Dependent Coverage
45
c.
Other Concessions
46
5.
Hiring Halls
46
6.
Remembrance or Flower Funds
46
7.
Strike Funds
46
8.
Industry Advancement Programs
47
9.
Certain Group or Group-Type Insurance Programs
47
a.
In General
47
b.
Individual Conversion Policies
52
10.
Unfunded Scholarship Programs
53
11.
Vacation Plans
53
12.
Other Excluded Benefits
54
C.
Sample Circuit Analyses
56
1.
Fifth Circuit
56
2.
Sixth Circuit
57
D.
Checklist for Determining Whether a Welfare Plan Is Covered by ERISA (Figure 1-1)
59
IV.
Standard of Review
60
ch. 2
Is an ERISA Pension Plan Involved?
61
I.
Overview
61
II.
Statutory Language
62
Erisa Section 3(2), Definition of Pension Plan
62
Erisa Section 3(3), Definition of Plan
63
Labor Management Relations Act Section 302(c), Restrictions on [Payments to Employee Representatives]: Exceptions. See Chapter 1 (Is an ERISA Welfare Plan Involved)?, at Section II
63
III.
Definition of Pension Plan
63
A.
How to Determine Whether a Pension Plan Is Governed by ERISA
63
B.
Is the Pension Plan Excluded as an IRA Under DOL Regulations?
66
C.
Other Types of Pension Plans
67
1.
Annuity Contracts, SEPs, and SIPs
67
2.
Severance Plans
68
3.
Bonuses, Including Stock Purchase Plans
68
4.
Supplemental Executive Retirement Plans and Top Hat Plans
70
D.
Putting It All Together
73
IV.
Standard of Review
75
ch. 3
Is the Plan Excluded From ERISA Coverage?
77
I.
Overview
78
II.
Statutory Language
78
Erisa Section 4, Coverage
78
Erisa Section 3(12), Industry Affecting Commerce
79
Erisa Section 3(32), Governmental Plan
79
Erisa Section 3(33), Church Plans
79
Erisa Section 3(36), Excess Benefit Plans
80
III.
What Plans Are Excluded by ERISA?
80
A.
Plans Not Affecting Commerce
80
B.
Governmental Plans
81
1.
Factors Analyzed to Determine Whether Plan Is Governmental
81
2.
"Establish or Maintain" Requirement
83
3.
Types of Governmental Plans
84
a.
Regional Governmental Facilities
84
b.
Public Universities, University Hospitals, and Schools
84
c.
Public Hospitals
85
d.
Federal Entities
85
e.
Miscellaneous
86
f.
Indian Tribes
86
4.
Mix of Public and Private Employees
88
C.
Church Plans
88
D.
Workers' Compensation Plans
91
E.
Foreign Plans
92
F.
Excess Benefit Plans
94
IV.
Can Plans Opt In to ERISA Coverage?
95
V.
Standard of Review
97
ch. 4
What Causes of Action Are Available?
99
I.
Overview
100
II.
Statutory Language
100
Erisa Section 502, Civil Enforcement
100
Erisa Section 409, Liability for Breach of Fiduciary Duty
105
Erisa Section 510, Interference With Protected Rights
105
Erisa Section 515, Delinquent Contributions
106
Erisa Section 4003, Investigatory Authority; Cooperation With Other Agencies; Civil Actions
106
Erisa Section 4070, Enforcement Authority Relating to Terminations of Single-Employer Plans
106
Erisa Section 4301, Civil Actions
107
III.
Erisa Causes of Action
107
A.
Section 502, in General
107
1.
Actions for Benefits Under Section 502(a)(1)(B)
107
2.
Actions for Breach of Fiduciary Duty Under Section 502(a)(2)
108
3.
Actions for Equitable Relief Under Section 502(a)(3)
110
4.
Actions for Failure to Provide Individual Benefit Statements Under Section 502(a)(4)
114
5.
Actions Brought by the Secretary of Labor Under Section 502(a)(5)
114
6.
Actions Brought by the Secretary of Labor to Collect Civil Penalties
115
7.
Actions by a Participant or Beneficiary to Recover Civil Penalties Under Section 502(a)(1)(A)
115
8.
Actions to Order Compliance With a Qualified Medical Child Support Order Under Section 502(a)(7)
116
9.
Actions Brought in Connection With Choice of Annuity Providers Under Section 502(a)(9)
116
10.
Actions Brought in Connection With Multiemployer Plans Under Section 502(a)(10)
116
11.
Actions for Review, Restraint, or Mandamus Under Section 502(k)
116
12.
Assessment of a Penalty on Impermissible Distributions Under Sections 502(m) and 206(c)
117
B.
Suits to Redress Discrimination, Retaliation, and Coercive Interference Under Section 510
117
C.
Actions to Redress Age, Sex, or Disability Discrimination
118
D.
Actions for Delinquent Contributions Under Section 515
118
E.
Actions for Withdrawal Liability
118
F.
Actions Brought by the Pension Benefit Guaranty Corporation
119
ch. 5
Preemption and Removal
121
I.
Overview
122
II.
Statutory Language
123
Erisa Section 514, Other Laws
123
III.
Preemption, in General
127
A.
Exceptions to ERISA Preemption
127
1.
Pre-ERISA Acts
127
2.
State Insurance, Banking, and Securities Laws
127
3.
Federal Laws
128
4.
Criminal Laws
129
5.
Exempt Plans
129
6.
Permitted State Regulation of MEWAs
129
7.
Recoupment of Medicaid Payments by the States
130
B.
State Laws, Defined
130
C.
Preemption of State Laws That "Relate to" an Employee Benefit Plan
131
1.
"Connection with" or "Reference to"
131
2.
Guidance From Travelers and Beyond on the Meaning of "Relate to"
132
3.
Limits on Preemption
137
a.
Tenuous, Remote, and Peripheral Effect
137
b.
Traditional Areas of State Regulation
139
c.
Factors to Consider
140
4.
Appellate Courts' Efforts to Wrestle With Preemption
143
IV.
Insurance Savings Clause
145
A.
The Law Before Kentucky Ass'n of Health Plans, Inc. v. Miller: the McCarran-Ferguson Test
146
1.
Does the Law Have the Effect of Spreading Policyholder Risk?
147
2.
Is the Law an Integral Part of the Relationship?
149
3.
Is the Practice Limited to Entities Within the Insurance Industry?
150
B.
Miller and Beyond
151
V.
Removal to Federal Court
155
A.
Complete Versus Conflict Preemption
155
B.
Procedural Issues
161
VI.
Impact of ERISA Preemption on Specific Substantive Areas
162
A.
Wrongful Discharge and Employment Discrimination
163
B.
Promises of Benefits and Misrepresentations
168
C.
Fraud-in-the-Inducement Cases
170
D.
Claims Based on Benefit Denials and Fiduciary Breaches, in General
171
E.
Suits Against Nonfiduciaries
174
F.
Domestic Relations Law and Beneficiary Designations
176
G.
Suits by Service Providers
177
H.
Defenses in Collection Suits
178
ch. 6
Who Are Enumerated Parties?
181
I.
Overview
181
II.
Statutory Language
182
Erisa Section 3(7), Definitions---Participant
182
Erisa Section 3(8), Definitions---Beneficiary
182
Erisa Section 3(21), Definitions---Fiduciary
182
Erisa Section 402(a), Establishment of Plan
183
Erisa Section 502(a), Civil Enforcement
183
III.
Enumerated Parties
185
A.
Participants and Beneficiaries
186
1.
In General
186
2.
Who Is a Participant?
187
3.
Who Is an Employee?
190
4.
Who Is a Beneficiary?
190
B.
Fiduciaries
191
1.
In General
191
2.
Statutory Fiduciaries
192
3.
De Facto Fiduciaries
201
4.
Investment Managers and Those Who Render Investment Advice
203
ch. 7
Who Can Sue?
207
I.
Overview
208
Figure 7-1
Who Can Sue Under ERISA Section 502
209
II.
Statutory Language
211
Erisa Section 502(a), (b), Civil Enforcement
211
Erisa Section 502(d)(1), Status of Employee Benefit Plan as Entity
213
Erisa Section 502(k), Jurisdiction of Actions Against Secretary of Labor
213
Erisa Section 403(c)(1), Exclusive Benefit Rule
213
Erisa Section 403(c)(2)(A)(i) and (ii), Return of Employer Contributions
214
Erisa Section 510, Interference With Protected Rights
214
Erisa Section 515, Delinquent Contributions
214
Erisa Section 4003(e)(1), Civil Actions by Corporation
215
Erisa Section 4301(a)(1), Civil Actions
215
III.
Standing to Sue
215
A.
In General
215
1.
Constitutional Standing
215
a.
Actual Injury
216
b.
Causal Connection
217
c.
Redressable Injury
217
2.
Prudential Standing
218
3.
Statutory Standing
218
4.
When Is Standing Determined?
219
B.
Participants and Beneficiaries
220
1.
Participants
220
2.
Former Employees and Cashed-Out Participants
221
3.
Employees
224
4.
Beneficiaries
225
C.
Fiduciaries
225
1.
In General
225
D.
Secretary of Labor
226
E.
Pension Benefit Guaranty Corporation
227
IV.
Nonenumerated Parties
227
A.
Does a Plan Have Standing to Sue?
227
B.
Does an Employer Have Standing to Sue?
228
1.
In General
228
2.
As a Fiduciary
229
3.
For Return of Mistaken Contributions
230
C.
Does a Union Have Standing to Sue?
232
V.
Derivative Standing
233
A.
Assignees
233
B.
Subrogees
238
C.
Derivative Standing for Delinquent Contributions
239
D.
Creditors
239
E.
Representational Standing
239
VI.
Standard of Review
241
ch. 8
Who Can Be Sued?
243
I.
Overview
244
II.
Statutory Language
244
Erisa Section 502, Civil Enforcement. See Chapter 4 (What Causes of Action Are Available?), at Section II
244
Erisa Section 502(d)(1), Suits by or Against Employee Benefit Plan
244
III.
Potential Defendants
244
A.
Denial of Benefits
244
1.
Plan, Plan Administrator, Trustees
246
2.
Third-Party Administrators and Insurers
247
3.
Employer
248
4.
De Facto Plan Administrators
249
5.
Miscellaneous
249
B.
Statutory Penalties
250
Figure 8-1
Statutory Civil Penalties That Can Be Sought by Participants and Beneficiaries
251
Figure 8-2
Statutory Civil Penalties That Can Be Sought by the Secretary
252
C.
Breach of Fiduciary Duty
257
D.
Equitable Relief
257
E.
Failure to Furnish Statement of Accrued Benefits
260
F.
Enforcing Plan Compliance With a Qualified Medical Child Support Order
260
G.
Purchase of "Executive Life"-Type Annuities
261
H.
Judicial Review of Actions by Secretary of Labor
261
I.
Intervention in Action Brought by Secretary
261
J.
Discrimination
261
ch. 9
What Remedies Are Available?
263
I.
Overview
264
II.
Statutory Language
265
Erisa Section 409, Liability for Breach of Fiduciary Duty
265
Erisa Section 502, Civil Enforcement. See Chapter 6 (Who Are Enumerated Parties?), at Section II
266
III.
What Rights Can Be Remedied Under Section 502(a)?
266
IV.
Statutory Remedies
267
A.
Remedies in Actions to Recover Benefits Under Section 502(a)(1)(B)
267
1.
Remedy for a Favorable Decision on the Merits
267
2.
Remedy for a Procedural Error
268
3.
Effect of Death of a Plaintiff on a Claim Under Section 502(a)(1)(B)
269
B.
Remedies to Recover for Fiduciary Breaches Under Sections 502(a)(2) and 409
270
1.
Who May Seek Relief Under Section 502(a)(2)?
270
2.
Removal Under Section 409 and Other Equitable Remedies
273
3.
Measuring Damages Under Section 502(a)(2)
273
C.
Remedies Under Section 502(a)(3)
274
1.
Individual Relief Under Section 502(a)(3)
275
a.
Appropriate Equitable Relief
275
i.
Restitution
275
ii.
Other Appropriate Equitable Relief
279
b.
Injunctive Relief
279
c.
Reformation
280
d.
Rescission
280
D.
Remedies Under Section 502(a)(5)
281
E.
Prejudgment Interest
281
F.
Remedies Available to Redress Failure to Provide Information
283
G.
Other Statutory Remedial Provisions
289
1.
Civil Penalties
289
2.
Enforcement of Qualified Medical Child Support Orders
290
3.
Defined Benefit Plan Funding Notices
290
4.
Relief With Respect to Insurance Annuity Purchase
291
5.
Restraint and Mandamus
291
6.
Penalties for Section 206(e) Violations
292
ch. 10
When Is Preliminary Relief Available?
293
I.
Overview
294
II.
Statutory Language
295
Federal Rules of Civil Procedure, Rule 65, Injunctions and Restraining Orders
295
III.
Standard for Obtaining Preliminary Relief
296
A.
Standard for Preliminary Relief, in General
296
1.
First Circuit
296
2.
Second Circuit
296
3.
Third Circuit
297
4.
Fourth Circuit
297
5.
Fifth Circuit
298
6.
Sixth Circuit
298
7.
Seventh Circuit
298
8.
Eighth Circuit
299
9.
Ninth Circuit
299
10.
Tenth Circuit
300
11.
Eleventh Circuit
300
12.
D.C. Circuit
300
B.
Demonstrating Irreparable Injury to the Plaintiff
301
1.
Denial of Health Care Benefits
301
2.
Plaintiff Injury Premised on the Defendant's Poor Financial Condition
304
3.
Other Examples of Irreparable Harm
306
4.
Balancing of Hardships
306
C.
Demonstrating Likelihood of Success on the Merits
307
D.
Equity and Public Policy Considerations
309
IV.
Standard of Review
310
ch. 11
What Is the Statute of Limitations?
311
I.
Overview
312
II.
Statutory Language
312
Erisa Section 413, Limitation of Actions
312
Erisa Section 4003, Operation of Corporation
312
III.
Limitation Period
313
A.
Erisa Section 502(a)(1)(B) Claims
313
Figure 11-1
State Law Limitation Periods for Contracts
315
B.
Erisa Section 502(a)(3) to (9) Claims
322
C.
Erisa Section 502(c) Claims
322
D.
Erisa Section 515 Claims
324
E.
Breach of Fiduciary Duty Claims
325
1.
Six-Year Limitation Period
325
2.
Three-Year Limitation Period
327
3.
Separate Limitation Period for Fraud or Concealment
331
F.
Erisa Section 510 Claims
333
Figure 11-2
Erisa Section 510---Analogous State Limitation Periods
334
G.
Pension Benefit Guaranty Corporation Cases
336
H.
Withdrawal Liability Cases
336
I.
COBRA Cases
337
IV.
Accrual and Tolling
337
A.
Accrual
337
1.
Benefit Denial Claims
337
2.
Claims Alleging Interference With Protected Rights
341
3.
Claims Alleging Breach of Fiduciary Duties
342
4.
Miscellaneous Claims
343
5.
Continuous Violations
344
B.
Tolling
345
1.
No Tolling During Filing in Inappropriate Forum
345
2.
No Tolling During Negotiations
345
3.
Tolling During Exhaustion of Internal Remedies
345
4.
Tolling During Fraudulent Concealment
347
5.
Tolling Due to Incompetence and Other Conditions
347
C.
Contraction of Statute of Limitations
348
D.
Relation Back to Original Pleading
350
V.
Burden of Proof
350
VI.
Equitable Laches and Estoppel
351
VII.
Choice of Law
352
VIII.
Standard of Review
353
ch. 12
Is Exhaustion of Remedies Required?
355
I.
Overview
356
II.
Statutory Language
357
Section 503, Claims Procedure
357
III.
Regulatory Language: The Department's View of Exhaustion
357
IV.
Exhaustion Requirement
358
A.
Claims Denial Cases
358
B.
Statutory Violations Cases
362
C.
Exceptions to the Exhaustion Requirement
365
1.
Futility
366
2.
Lack of Meaningful Access
371
3.
Irreparable Harm
375
4.
Reasonable Reliance on Plan Language
376
5.
Claims Deemed Denied or Exhausted
376
6.
Reverse Exhaustion
378
V.
Exhaustion as an Affirmative Defense
378
ch. 13
What Courts Have Subject Matter Jurisdiction?
381
I.
Overview
382
II.
Statutory Language
382
28 U.S.C. [§]1331, [Original Jurisdiction of the District Courts]
382
Erisa Section 502(e)(1), Civil Enforcement: [Exclusive and Concurrent Jurisdiction]
382
Erisa Section 502(f), Civil Enforcement: Jurisdiction [Notwithstanding] Amount in Controversy; Citizenship of Parties
383
III.
Federal Court Subject Matter Jurisdiction
383
A.
Existence of Federal Court Subject Matter Jurisdiction
383
1.
Jurisdiction Over Federal Claims
383
2.
Jurisdiction Over Related State Law Claims
384
B.
Common Factors That Deprive Federal Courts of Subject Matter Jurisdiction
386
1.
Case Does Not Involve Resolution of an ERISA Claim
386
2.
Case Does Not Involve an ERISA Plan
387
3.
Plaintiff Lacks Standing
389
4.
Cause of Action Arose Prior to Effective Date of ERISA
390
5.
Case Does Not Involve a Remedy Permissible Under ERISA
390
C.
Consequences of Lack of Federal Subject Matter Jurisdiction
391
IV.
Concurrent State Court Jurisdiction
392
V.
Standard of Review
393
VI.
Burden of Proof
393
ch. 14
How Is Process Served?
395
I.
Overview
396
II.
Statutory Language
396
Erisa Section 502(d)(1), Status of Employee Benefit Plan as Entity
396
Erisa Section 502(e)(2), Jurisdiction
396
Erisa Section 502(h), Service Upon Secretary of Labor and Secretary of the Treasury
397
Erisa Section 4301(d), Venue and Service of Process
397
Federal Rules of Civil Procedure Rule 4(e), Serving an Individual Within a Judicial District of the United States
397
Federal Rules of Civil Procedure Rule 4(h), Serving a Corporation, Partnership, or Association
397
Federal Rules of Civil Procedure Rule 4(k), Territorial Limits of Effective Service
398
Federal Rules of Civil Procedure Rule 12(b), How to Present Defenses
398
Federal Rules of Civil Procedure Rule 12(h)(1), Waiving and Preserving Certain Defenses
399
III.
Service of Process
399
A.
Nationwide Service of Process
399
1.
Only Enumerated Parties Can Use Nationwide Service
400
2.
Service on Nonparties
400
3.
Worldwide Service
401
4.
Service of Trial Subpoenas
401
B.
How Service Is Made
401
1.
Service on Plan
402
2.
Service on Alter Egos
404
3.
Service on Employers
405
C.
Effect of Insufficient Service
405
IV.
Burden of Proof
406
ch. 15
Where Is Venue Appropriate?
407
I.
Overview
408
II.
Statutory Language
408
Erisa Section 502(e)(2), [General Venue Provision]
408
Erisa Section 502(k), Jurisdiction of Actions Against Secretary of Labor
409
Erisa Section 4301(d), Venue and Service of Process [for Withdrawal Liability Cases]
409
Erisa Section 4003(e)(2), [Venue for PBGC Cases]
409
Erisa Section 4007(c), [Venue for PBGC Penalty]
409
28 U.S.C. [§]1404, Change of Venue
409
28 U.S.C. [§]1406(a), [Dismissal or Transfer for Venue Defect]
410
Federal Rules of Civil Procedure Rule 12(h)(1), Waiving and Preserving Certain Defenses
410
III.
Choice of Venue
410
A.
Liberal Construction of Venue Provisions in ERISA Cases
410
B.
Possible Venue Sites
412
1.
Where Is the Plan Administered?
413
2.
Where Does the Breach Occur?
414
a.
Denial of Benefit Cases
414
b.
Breach of Fiduciary Duty Cases
414
3.
Where Does the Defendant Reside?
415
4.
Where May Defendants Be Found?
415
a.
Varsic: The Leading Case
415
b.
Other Cases
416
5.
Forum Selection Clauses
417
C.
Special Situations
419
1.
Actions Against the Secretary of Labor
419
2.
Withdrawal Liability Cases
420
3.
Assignees
420
IV.
Motions to Transfer
421
A.
Purpose
421
B.
Court's Discretion to Transfer
421
C.
Deference Given to the Plaintiff's Choice of Venue
422
D.
Relevant Factors in Deciding Whether to Transfer
424
1.
Convenience
428
2.
Production of Documents
429
3.
Interest of Justice
430
a.
Financial Burdens
430
b.
Obstacles to a Fair Trial
430
c.
Possibility of Delay
431
d.
Court's Familiarity With the Law of the State
431
E.
Appeal
432
V.
Waiver of Improper Venue
432
VI.
Dismissal for Lack of Venue
433
VII.
Venue for Removed Cases
433
VIII.
Burden of Proof
433
IX.
Standard of Review
434
ch. 16
Does the Court Have Personal Jurisdiction Over the Defendant?
435
I.
Overview
435
II.
Statutory Language
436
Federal Rules of Civil Procedure Rule 4(k)(1)(C), [Jurisdiction Over Defendant as Authorized by Statute]
436
Federal Rules of Civil Procedure Rule 12(b), How to Present Defenses
437
Federal Rules of Civil Procedure Rule 12(h)(1), Waiving and Preserving Certain Defenses
437
U.S. Constitution, Amendment V, [Due Process Clause]
437
III.
Personal Jurisdiction
437
A.
Majority View: National Contacts
437
B.
Minority View: Minimum Contacts With the Forum State
441
C.
Due Process Requirements
442
D.
Pendent Personal Jurisdiction
446
IV.
Withdrawal Liability Cases
446
V.
Waiver of Personal Jurisdiction
447
VI.
Burden of Proof
447
VII.
Standard of Review
448
ch. 17
Is a Jury Trial Available?
449
I.
Overview
449
II.
Statutory Language
450
U.S. Constitution, Amendment VII, [Right of Trial by Jury]
450
III.
The Availability of a Jury Trial
450
A.
Actions for Benefits Under ERISA Section 502(a)(1)(B)
450
B.
Actions for Breach of Fiduciary Duty Under ERISA Section 502(a)(2)
453
C.
Actions for Injunctions or Other Equitable Relief Under ERISA Section 502(a)(3)
454
D.
Actions for Interference or Retaliation Under ERISA Section 510
454
E.
Actions for Delinquent Contributions Under ERISA Section 515
455
F.
Actions Raising Both Legal and Equitable Claims
455
1.
Retiree Health Claims
455
2.
Delinquent Contributions
457
G.
Jury Trial in the Absence of Right
457
IV.
Standard of Review
458
ch. 18
Are Attorneys' Fees Available?
459
I.
Overview
460
II.
Statutory Language
460
Erisa Section 502(g), Attorney's Fees and Costs
460
Erisa Section 4301(e), [Actions to Compel Withdrawal Liability Payments]
461
III.
Will Attorneys' Fees Be Awarded?
461
A.
Background
461
B.
Preliminary Considerations---Jurisdiction
462
C.
Overview of Discretionary and Mandatory Fee Awards
462
1.
Erisa Section 502(g)(1)
462
2.
Erisa Section 502(g)(2)
463
3.
Other ERISA Fee Provisions
464
a.
Arbitration
464
b.
Withdrawal Liability
464
4.
Other Pertinent Federal Fee Provisions
464
D.
Determining Whether to Award Discretionary Attorneys' Fees
465
1.
The Five-Factor Test for Awarding Attorneys' Fees Before Hardt
465
2.
The Five-Factor Test Post-Hardt: Some Degree of Success on the Merits
468
3.
Substantial Justification or Special Circumstances Test
469
4.
Awards Based on Settlement
470
E.
Against Whom Should an Attorneys' Fee Award Be Assessed?
470
IV.
Calculating the Amount of a Fee Award
471
A.
Background---What Is a "Reasonable" Fee Award?
471
B.
The Starting Point---The Lodestar Formula
471
C.
Use of a "Multiplier" to Adjust the Lodestar Amount
473
D.
Percentage-Based Calculation as an Alternative to the Lodestar Method
473
E.
Items That May Be Included in a Fee Award
475
V.
Procedural Aspects
477
A.
Timing the Attorneys' Fee Request
477
B.
Proof Required to Support the Attorneys' Fee Request
478
VI.
An Award of Costs
478
VII.
Standard of Review
479
ch. 19
What Is the Appropriate Standard of Review for Adverse Benefit Determinations?
481
I.
Overview
483
II.
Firestone Tire & Rubber Co. v. Bruch
485
A.
The Standard of Review Before Firestone
485
B.
The Standard of Review After Firestone: De Novo Versus Abuse of Discretion
486
III.
The Mechanics of Bestowing Discretion
488
A.
What Language Is Sufficient to Confer Discretion?
488
B.
Where Must Discretionary Language Appear to Be Effective?
497
1.
Is Deferential Review Appropriate When the Discretionary Authority Provision Appears Only in the Formal Plan Document and Not in the Summary Plan Description?
498
2.
Is Deferential Review Appropriate When the Discretionary Authority Provision Appears in the Summary Plan Description But Not the Formal Plan Document?
500
C.
What Is Required to Effectively Delegate Duly Reserved Discretion to a Third Party?
504
1.
Must the Plan Expressly Authorize Delegation of Discretion?
504
2.
Where Delegation Is Authorized by the Plan, What Procedure Is Sufficient to Effectuate Delegation?
506
D.
May the States Prohibit Discretionary Authority Clauses?
507
IV.
De Novo Review
509
A.
What Evidence May the Courts Consider on De Novo Review?
509
B.
The Mechanics of De Novo Review
513
V.
Abuse of Discretion Review
514
A.
Reasonableness, Substantial Evidence, and Other Judicial Touchstones of Deferential Review
514
B.
What Evidence May the Courts Consider on Deferential Review?
524
1.
As a General Rule, Deferential Review Is Limited to the Administrative Record
524
2.
Special Variations on the Theme
525
a.
Fifth Circuit
525
b.
Ninth Circuit
526
3.
Exceptions Permitting Supplementation of the Administrative Record
527
C.
Judicial Consideration of the Conflicted Administrator After Metropolitan Life Insurance Co. v. Glenn
530
1.
Overview of Metropolitan Life Insurance Co. v. Glenn: A "Combination of Factors" Standard of Review
530
a.
The Majority Opinion
530
b.
Concurrence and Dissent
533
2.
Conkright v. Frommert: "People Make Mistakes"
534
3.
Appellate Cases Post-Glenn
535
a.
First Circuit
535
b.
Second Circuit
537
c.
Third Circuit
539
d.
Fourth Circuit
540
e.
Fifth Circuit
542
f.
Sixth Circuit
545
g.
Seventh Circuit
547
h.
Eighth Circuit
550
i.
Ninth Circuit
551
j.
Tenth Circuit
557
k.
Eleventh Circuit
559
l.
D.C. Circuit
560
D.
Loss (or Other Impairment) of Deferential Review
560
1.
Where an Unauthorized Party Acts for the Plan
560
2.
Untimely Appeal Determinations: The "Deemed Denied" Dilemma
561
3.
Other Procedural Violations
564
a.
De Novo Review as a Remedy for "Flagrant" Procedural Violations
565
b.
Curing Procedural Violations by Remand for Further Administrative Review
566
c.
The Sixth and Seventh Circuits: Remediation of Procedural Flaws Based on Returning the Claimant to the Status Quo Ante
568
d.
The Standard of Review Following Remand to Administrator
570
E.
Erisa Common Law and Rules of Construction Affecting the Standard of Review
571
1.
Contra Proferentem
571
a.
First Circuit
572
b.
Second Circuit
573
c.
Third Circuit
573
d.
Fourth Circuit
574
e.
Fifth Circuit
575
f.
Sixth Circuit
575
g.
Seventh Circuit
576
h.
Eighth Circuit
577
i.
Ninth Circuit
578
j.
Tenth Circuit
578
k.
Eleventh Circuit
579
l.
D.C. Circuit
580
2.
Reasonable Expectations
580
VI.
The Standard of Review for "Top Hat" Plans
581
ch. 20
Pretrial Discovery in ERISA Benefits Cases
585
I.
Overview
585
II.
Discovery in Cases Applying De Novo Review
586
III.
Discovery in Cases Applying Arbitrary and Capricious or Abuse of Discretion Review
589
A.
A Structural Conflict of Interest Does Not Alter Abuse of Discretion Review
590
B.
Limited Conflict Discovery Allowed
592
C.
Quantum of Permissible Discovery
595
D.
Conflict Discovery Prohibited
596
IV.
Discovery for Other Purposes
597
ch. 21
Attorney-Client Privilege and Work Product Doctrine
599
I.
Overview
599
II.
The Fiduciary Exception to the Attorney-Client Privilege
600
III.
Privilege and Work Product in the Context of an ERISA Litigation Claim
604
IV.
The Government's Right to Assert the Trustee-Beneficiary Exception
608
ch. 22
Is Class Action Appropriate?
609
I.
Overview
610
II.
Statutory Language
610
Federal Rules of Civil Procedure Rule 23, Class Actions
610
III.
Requirements of Federal Rule 23(a)
611
A.
Rule 23(a)(1): Numerosity
612
B.
Rule 23(a)(2): Commonality
613
C.
Rule 23(a)(3): Typicality
614
D.
Rule 23(a)(4): Adequacy of Representation
616
IV.
Requirements of Federal Rule 23(b)
617
A.
Rule 23(b)(1)
618
B.
Rule 23(b)(2)
619
C.
Rule 23(b)(3)
620
V.
Particular ERISA Class Action Claims
620
A.
Claims for Benefits Under ERISA Section 502(a)(1)(B)
620
B.
Disclosure, Misrepresentation, and Prudence Claims Under ERISA Section 502(a)(2) and (a)(3)
621
C.
Suits to Enforce Plan and Statutory Provisions
626
VI.
Erisa Class Action Defenses
628
A.
Lack of Standing
628
B.
Class Members Have Signed Releases
630
C.
Section 404(c) Plans
632
D.
Failure of Non-Party Class Members to Exhaust Administrative Remedies
633
1.
Courts Recognizing Vicarious Exhaustion by the Class Representative
633
2.
Cases Rejecting Vicarious Exhaustion
634
VII.
Appellate Review of Ruling on Class
636
VIII.
Class Certification Experts
637
IX.
Settlement of ERISA Class Actions
638
A.
The Department of Labor Class Exemption
638
B.
The Class Action Fairness Act of 2005
638
pt. II
Potential Causes of Action
ch. 23
Wrongful Denial of Benefits
641
I.
Overview
642
II.
Statutory Language
643
Erisa Section 502(a)(1)(B)
643
III.
Procedural Matters Regarding Benefit Denials
643
IV.
Benefit Denial Litigation
650
A.
Health Care Plans
650
1.
Eligibility for Coverage Under the Plan
651
2.
Experimental or Investigational Treatment
652
3.
Medical Necessity
653
4.
Usual, Reasonable, and Customary Charges
654
5.
Preexisting Conditions
655
6.
Treatment of Illness/Provision of Medical Care
656
7.
Efforts to Seek Preliminary Injunctions to Prevent Benefit Denials
657
B.
Severance Plans
658
1.
What Constitutes Cause?
660
2.
Change in Control and Constructive Discharge
662
3.
Effect of Violation of ERISA's Disclosure Requirements
664
4.
Informal and Implied Severance Plans
664
C.
Disability Plans
664
D.
Accidental Death or Injury Benefits
677
E.
Life Insurance Plans
681
F.
Pension Plans
683
1.
Participant Entitlement to Benefits
683
2.
Calculation of Benefit Amount
685
3.
Break-in-Service Rules
689
4.
Suits for Vested Benefits Following Plan Termination
689
V.
Standard of Review
690
ch. 24
[Reserved]
695
ch. 25
Managed Care Litigation
697
I.
Overview
698
II.
Managed Care Liability Under ERISA
698
A.
Background
698
B.
Pegram v. Herdrich
699
C.
Erisa Claims Post-Pegram
700
III.
Managed Care Liability Under State Law
701
A.
U.S. Supreme Court Preemption Guidance
701
B.
Participant Benefit Claims Litigation and Medical Malpractice
702
1.
Pre-Pegram
702
2.
From Pegram to Davila
704
3.
Davila and Mixed Eligibility and Treatment Decisions
706
C.
Health Care Provider Claims and Health Care Benefits Claims Litigation
708
IV.
State Statutory Attempts to Regulate Managed Care
712
A.
Generally
712
B.
Any Willing Provider Statutes
714
C.
External Review Provisions
714
ch. 26
COBRA Litigation
717
I.
Overview
719
II.
Statutory Language
720
Erisa Section 601, Plans Must Provide Continuation Coverage to Certain Individuals
720
Erisa Section 602, Continuation Coverage
720
Erisa Section 603, Qualifying Event
722
Erisa Section 604, Applicable Premium
723
Erisa Section 605, Election
724
Erisa Section 606, Notice Requirements
724
Erisa Section 607, Definitions and Special Rules
725
Erisa Section 609(a)(1), Additional Standards for Group Health Plans
727
Erisa Section 714, Coverage of Dependent Students on Medically Necessary Leave of Absence
727
III.
Coverage Requirements
728
A.
Qualifying Events
729
1.
Termination of Employment/Reduction of Hours
730
2.
Gross Misconduct
731
3.
Divorce
734
4.
Loss of Coverage Not Due to Qualifying Event
735
B.
Required Coverage
737
C.
Period of Coverage
738
1.
Statutory Period of Coverage
738
2.
Termination Prior to End of Statutory Period of Coverage
739
D.
Conversion Rights Upon Termination of Coverage
741
IV.
Notice Requirements
742
A.
Erisa Section 606 Notice Requirements
742
1.
Initial COBRA Notice
742
2.
COBRA Election Notice
743
3.
Trade Act of 2002
743
4.
Furnishing of COBRA Notices
743
5.
Notice Requirements
744
a.
Employers
744
b.
Employees and Other Qualified Beneficiaries
744
c.
Notice Requirements for Plan Administrators
744
B.
Required Notice
745
1.
Summary Plan Description Requirements
745
2.
Initial Notice of Coverage
745
3.
COBRA Deadlines for Qualifying Events, Election, and Payment
746
C.
To Whom Must Notice Be Provided?
747
D.
Consequences of Failure to Give Notice
747
E.
Who Is Required to Give Notice?
748
F.
What Constitutes Adequate Notice?
749
V.
Corporate Transactions
754
VI.
Remedies for COBRA Violations
756
A.
Civil Penalties
757
B.
Penalties for Fiduciary Breach
761
C.
Other Remedies for COBRA Notice Violations
764
VII.
Tips
765
A.
Preventive Strategies to Avoid COBRA Litigation
765
Figure 26-1
Plan Sponsor Checklist for COBRA Notice Rules
769
B.
Tips to Potential Plaintiffs in COBRA Litigation
769
1.
Exhaustion
769
2.
Estoppel
770
3.
State Laws
771
4.
Claims Against Nonfiduciaries
771
5.
Removal
771
6.
Damages
772
7.
Standing to Sue
773
8.
Other Tips
773
ch. 27
Spousal Rights
775
I.
Overview
776
II.
Statutory Language
777
Erisa Section 3(8), Definition of Beneficiary
777
Erisa Section 205, Requirements of Joint and Survivor Annuity and Pre-Retirement Survivor Annuity
777
Erisa Section 206(d), Assignment or Alienation of Plan Benefits
782
Erisa Section 402(b)(4), Establishment of Plan
785
Erisa Section 404(a)(1)(D), Fiduciary Duties
786
Erisa Section 514, Other Laws
786
III.
Alphabet Soup: QJSAs, QOSAs, QPSAs, QDROs, and QMCSOs
786
A.
Qualified Joint and Survivor Annuities, Qualified Optional Survivor Annuities, and Qualified Preretirement Survivor Annuities
786
B.
Qualified Domestic Relations Orders
789
C.
Qualified Medical Child Support Orders
793
IV.
Qualification and Other QDRO Requirements
793
A.
When Right to Spousal Benefits Terminates
793
B.
Can a Probate Order Be a QDRO?
794
C.
Is There a Deadline for Obtaining a QDRO?
795
D.
Continuing Nature of Distribution
796
E.
Nonqualification of QDROs
798
1.
"Relates to" Child Support, Alimony, or Marital Property Rights
799
2.
Identification of Plan Participant
800
3.
Addresses
802
4.
Specificity of Amount or Percentage of the Participant's Benefits
803
5.
Specificity of Number of Payments or Periods
804
6.
Identification of the Plan
805
7.
No Benefit Not Otherwise Provided
806
8.
No Increased Benefits Permitted
806
9.
No Payment to an Alternate Payee If a Previous Alternate Payee Exists
807
F.
Looking Behind a QDRO
807
G.
Who Has Jurisdiction to Determine the Validity of a QDRO?
809
H.
Waiver of Benefit Entitlement
810
I.
Modification of QDRO
811
J.
Miscellaneous Cases
811
V.
Preemption of Community Property Law
813
VI.
Beneficiary Designation Cases
814
A.
Egelhoff v. Egelhoff
814
B.
Beneficiary Designation Cases
817
1.
Waiver by Divorce or Settlement Agreement
817
2.
Waiver by Prenuptial Agreement
819
3.
Waiver by Litigation
820
4.
Waiver by Murder
821
5.
Waiver by Tax Levy
821
6.
Waiver by Embezzlement
822
7.
Beneficiary Designation Change by Will
822
C.
Doctrine of Substantial Compliance
822
D.
Imposition of Constructive Trust
826
E.
Breach of Fiduciary Duty
827
F.
Individual Retirement Accounts
828
G.
Miscellaneous Cases
829
VII.
Standard of Review
830
ch. 28
Retiree Welfare Benefits
831
I.
Overview
832
II.
Retiree Welfare Benefits Under ERISA
833
A.
Collectively Bargained Plans
835
1.
The Yard-Man Inference
835
2.
Post-Yard-Man Developments
836
B.
Nonunion Plans
837
C.
Reservation-of-Rights Clauses
839
D.
Reporting and Disclosure Requirements
841
E.
Erisa's Fiduciary Standards and Retiree Benefit Termination
843
III.
Survey of Current Circuit Court Cases
844
A.
First Circuit
844
1.
Cases Involving Unionized Workforces
844
2.
Cases Involving Nonunionized Workforces
845
B.
Second Circuit
845
1.
Cases Involving Unionized Workforces
845
C.
Third Circuit
847
1.
Cases Involving Unionized Workforces
847
2.
Cases Involving Nonunionized Workforces
847
D.
Fourth Circuit
848
1.
Cases Involving Unionized Workforces
848
2.
Cases Involving Nonunionized Workforces
848
E.
Fifth Circuit
849
1.
Cases Involving Unionized Workforces
849
2.
Cases Involving Nonunionized Workforces
849
F.
Sixth Circuit
850
1.
Cases Involving Unionized Workforces
850
2.
Cases Involving Nonunionized Workforces
852
G.
Seventh Circuit
853
1.
Cases Involving Unionized Workforces
853
2.
Cases Involving Nonunionized Workforces
856
H.
Eighth Circuit
857
1.
Cases Involving Unionized Workforces
857
2.
Cases Involving Nonunionized Workforces
858
I.
Ninth Circuit
858
1.
Cases Involving Unionized Workforces
858
2.
Cases Involving Nonunionized Workforces
859
J.
Tenth Circuit
859
1.
Cases Involving Unionized Workforces
859
K.
Eleventh Circuit
860
1.
Cases Involving Unionized Workforces
860
2.
Cases Involving Nonunionized Workforces
860
L.
D.C. Circuit
860
ch. 29
Fiduciary Duty as a Basis for Recovery for Misrepresentation and Nondisclosure
861
I.
Overview
862
II.
Misrepresentation Claims
863
A.
Window Plans and the "Serious Consideration" Cases
863
1.
First Generation Cases
864
2.
Second Generation Cases
865
3.
Implications for Employers
871
B.
Individual Misrepresentation Claims
872
1.
Varity Corp. v. Howe
872
2.
Application of Varity
874
C.
Special Case of Disclosures in Summary Plan Descriptions
876
III.
Nondisclosure Claims
877
A.
The Ever-Evolving and Expanding "Duty to Inform" Claims
877
1.
Trust Law Duties to Inform
877
2.
Judicial Application of Duties to Inform
878
3.
Limits on Duty to Inform
882
B.
Duty to Inform and Plan Interpretation
886
C.
Duty to Inform and Processing Benefits Claims
887
IV.
Some Defenses
888
A.
Whether "Fiduciary" Communications Are Involved
888
1.
Potential Agency Defenses
888
2.
Fiduciary Versus Business Communications
890
B.
The "Equitable Remedies" Limitation
892
C.
Erisa Preemption and Disclosure Claims
895
V.
Methods to Limit Exposure
896
VI.
Disclosure Claims Related to Plan Investments and Plan Assets
898
ch. 30
Estoppel as a Basis for Recovery for Misrepresentation
901
I.
Overview
902
II.
Basic Elements of an Estoppel Claim
905
A.
First Circuit
905
B.
Second Circuit
906
C.
Third Circuit
907
D.
Fourth Circuit
907
E.
Fifth Circuit
908
F.
Sixth Circuit
908
G.
Seventh Circuit
909
H.
Eighth Circuit
909
I.
Ninth Circuit
910
J.
Tenth Circuit
911
K.
Eleventh Circuit
912
L.
D.C. Circuit
912
III.
Establishing the Elements of an Estoppel Claim
913
A.
Detrimental Reliance
913
B.
Material Representation
915
1.
Definition of "Material"
915
2.
Types of Representations
916
3.
Actual Harm
917
C.
Reasonable Reliance
918
1.
Reservation of Rights Clauses
920
2.
Inaccurate Summary Plan Descriptions
922
D.
Ambiguous Plan Terms
925
1.
Most Circuits Require Ambiguity in Written Plan Terms as a Condition to an Estoppel Claim
926
2.
Exceptions to the General Rule
930
E.
Extraordinary Circumstances Required
932
IV.
Effect of Type of Plan
936
A.
Pension Versus Welfare Plans
936
B.
Single Employer Versus Multiemployer Plans
936
ch. 31
Interference With Protected Rights
939
I.
Overview
940
II.
Statutory Language
941
Erisa Section 510, Interference With Protected Rights
941
Erisa Section 511, Coercive Interference
941
III.
Construction of ERISA Section 510
942
IV.
Procedural Issues
946
A.
Standing
946
B.
Jurisdiction
949
C.
Venue
950
D.
Process
950
E.
Permissible Defendants in ERISA Section 510 Cases
950
F.
Removal Jurisdiction for ERISA Section 510 Claims
952
G.
Right to Jury Trials
952
H.
Affirmative Defenses
952
1.
Statute of Limitations
952
2.
Exhaustion of Administrative Procedures
953
3.
Other Affirmative Defenses
955
V.
Analytical Framework for ERISA Section 510 Cases
955
A.
Proving and Defending Against Claims of Interference Where There Is Circumstantial Evidence of Discriminatory Intent
956
1.
First Stage of the McDonnell Douglas Framework: Establishing an ERISA Section 510 Prima Facie Case
957
2.
Second Stage of the McDonnell Douglas Framework: Production by the Defendant of Legitimate Reasons for Interfering With a Participant's Rights
959
3.
Third Stage of the McDonnell Douglas Framework: Proving Pretext Under ERISA Section 510
959
4.
Application of the McDonnell Douglas Framework: Survey of Cases
960
a.
Erisa Section 510 Cases Decided After Reeves
960
b.
Erisa Section 510 Cases Decided Before Reeves
963
I.
Loss of Benefits Resulting From Terminations of Employment
963
II.
Loss of Benefits Through Plan Amendments and Terminations
965
III.
Loss of Benefits Resulting From Plant Closings or Reductions in Force
965
B.
Proving and Defending Against Claims of Interference Where There Is Direct Evidence of Discriminatory Intent
967
ch. 32
Age Discrimination in Employee Benefits
969
I.
Overview
970
II.
Statutory Language
971
29 U.S.C. [§]623(a), [Prohibited Conduct]
971
29 U.S.C. [§]623(f)(2), [Prohibition Against Involuntary Retirement]
972
29 U.S.C. [§]623(i)(1) and (2), [Prohibited Discrimination in Accrual or Allocation on Account of Age]
972
29 U.S.C. [§]623(i)(10), [Special Rules Relating to Age] (added by the Pension Protection Act)
972
III.
Older Workers Benefit Protection Act and Early Retirement Exceptions to the ADEA
973
IV.
Age Discrimination in Employment Act Coverage
975
A.
Who Is Covered by the ADEA?
975
B.
Who Is Protected by the ADEA?
976
V.
Proving a Violation of the ADEA
977
A.
Prima Facie Case
977
B.
Disparate Treatment and Disparate Impact
979
VI.
Issues in Employee Benefits/ADEA Litigation
981
A.
Former Employees
981
B.
Ability to Reduce Benefits as Employees Age
982
C.
Cash Balance Pension Plans
985
D.
Age Discrimination Against Younger, Protected Employees
988
E.
Offset of Benefits
989
F.
Waivers and Releases
990
ch. 33
Fiduciary Duties Regarding 401(k) and ESOP Investments in Employer Stock
995
I.
Overview
996
II.
Statutory Language
999
Erisa Section 404, Fiduciary Duties
999
Erisa Section 406, Prohibited Transactions
1000
Erisa Section 407, Limitations With Respect to Acquisition and Holding Employer Securities and Employer Real Property by Certain Plans
1001
III.
Procedural and Remedy Issues
1001
A.
Relationship Between the ERISA Case and the Securities Fraud Case
1003
B.
Federal Rules of Civil Procedure Rule 9(b)'s "Plead Fraud With Particularity" Requirements for ERISA Fiduciary Claims
1005
C.
Class Actions on Behalf of the Plan Under Section 502(a)(2) of ERISA
1006
IV.
Substantive Issues Common to Failure to Disclose and the Prudent Investment Claims
1008
A.
Damages and Duties in Light of the Securities Laws' "Disclose or Abstain" Rule
1008
B.
Director and Officers and the Duty to Monitor
1009
C.
Company Status as a Plan Fiduciary
1011
D.
Directed Trustees and Plan Investments in Employer Stock
1013
V.
The Prudent Investment Claims
1016
A.
The Distinction Between a Settlor and a Fiduciary in Regard to Plan Investments
1016
B.
The Standard of Prudence Regarding Investments in Employer Stock
1016
C.
Section 404(c) of ERISA and Fund Selection
1025
VI.
"Failure to Disclose" Claims
1027
A.
Communications and Fiduciary Status
1028
B.
Affirmative Disclosure Duties Regarding a Company's Business and Financial Information
1032
C.
Section 404(c) of ERISA as a Defense to Disclosure Claims
1034
VII.
Special Issues in ESOPs of Closely Held Companies
1035
A.
Valuing the Company's Stock
1037
B.
Separating ESOP Administration From Company Management
1044
C.
Control of the Closely Held Company and of the ESOP
1049
ch. 34
Fees and Expenses Litigation in Defined Contribution Plans
1051
I.
Introduction
1052
II.
Overview of the Claims
1052
A.
Nonproprietary Fund (Large 401(k) Plan) Cases
1052
B.
Proprietary Fund Cases
1053
C.
Gatekeeper Cases
1054
III.
Common Issues and Defenses in Excessive-Fee Litigation
1054
A.
Failure to State a Claim
1054
B.
Procedural and Substantive Prudence
1057
1.
Procedural Prudence
1058
2.
Substantive Prudence
1060
C.
Whether a Duty to Disclose Revenue-Sharing Arrangements Exists
1062
1.
Regulatory Requirements
1062
2.
Key Cases
1063
D.
Section 404(c) Safe Harbor for Plan Fiduciaries
1065
E.
Class Certification
1068
F.
Damages and Other Relief Awarded
1069
IV.
Key Issues in Gatekeeper Cases
1070
A.
Fiduciary Status of Service Provider
1070
B.
Whether Revenue-Sharing Payments Are Plan Assets
1072
C.
Plaintiff's Standing to Bring a Claim
1073
D.
Class Certification
1074
ch. 35
Defined Benefit Plan Investments
1077
I.
Overview
1077
II.
Statutory Language
1078
Erisa Section 404(a), (b), Fiduciary Duties
1078
Erisa Section 406, Prohibited Transactions
1079
Erisa Section 408(a), (b), Exemptions From Prohibited Transactions
1079
III.
Application of Statutory Fiduciary Standards to Plan Investment Issues
1080
A.
Duty of Loyalty
1081
B.
Duty of Prudence
1083
C.
Duty of Diversification
1088
D.
Duty to Act in Accordance With Plan Documents
1090
IV.
Prohibited Transactions in Plan Investments
1092
A.
Transactions Between a Plan and a Party in Interest
1093
B.
Fiduciary Self-Dealing
1094
C.
Fiduciary Acting on Behalf of a Party With Interests Adverse to Those of the Plan
1096
D.
Fiduciary Receiving Consideration for Its Personal Account from Party Dealing With Plan
1096
V.
Plan Expenses
1097
ch. 36
Amendment and Termination of Pension Plans
1099
I.
Overview
1100
II.
Statutory Language
1101
Erisa Section 204, Benefit Accrual Requirements
1101
Erisa Section 4041, Termination of Single-Employer Plans
1102
Erisa Section 4047, Restoration of Plans
1102
Erisa Section 4061, Amounts Payable by Corporation
1103
Erisa Section 4062, Liability for Termination of Single-Employer Plans Under a Distress Termination or a Termination by Corporation
1103
Erisa Section 4068, Lien for Liability
1105
Erisa Section 4069, Treatment of Transactions to Evade Liability; Effect of Corporate Reorganization
1107
III.
Plan Amendments
1108
A.
General
1108
B.
Reduction of Accrued Benefits
1111
1.
Amendments Having the Effect of Reducing Accrued Benefits
1113
2.
Plan Amendment Versus Plan Interpretation
1115
3.
Reductions in Benefits Resulting From Acquisitions
1116
4.
Early Retirement Benefits and Retirement-Type Subsidies
1118
5.
Other Issues
1119
C.
Cash Balance Conversions
1121
IV.
Standard Termination Issues
1125
V.
Distress Termination Issues
1129
A.
Distress Termination Requirements
1130
B.
Termination Date
1133
C.
Controlled Group Liability
1135
1.
Membership in Contributing Sponsor's Control Group on Termination Date
1135
2.
Transactions to Evade Liability
1136
D.
Priority of Pension Benefit Guaranty Corporation Claim
1137
E.
Restoration
1138
ch. 37
Contingent Workers and Employee Benefits
1139
I.
Overview
1140
II.
Statutory Language
1142
Code Section 401(a)(2), Qualified Pension, Profit-Sharing, and Stock Bonus Plans
1142
Code Section 414(n), Definitions and Special Rules; Employee Leasing
1142
Erisa Section 404(a)(1), Fiduciary Duties. See Chapter 33 (Fiduciary Duties Regarding 401(k) and ESOP Investments in Employer Stock), at Section II
1144
Erisa Section 510, Interference With Protected Rights. See Chapter 31 (Interference With Protected Rights), at Section II
1144
III.
Benefit Eligibility as a Function of Worker Status
1144
A.
Favorable Treatment of Employee Benefit Plans Under the Internal Revenue Code
1145
B.
Tax Consequences of Misclassification
1146
1.
Consequences of Excluding Common Law Employees
1147
2.
Consequences of Including Independent Contractors
1147
C.
Who Is a "Common Law Employee" for Benefit Eligibility Purposes?
1149
D.
Who Is a Contingent Worker?
1151
1.
Independent Contractors
1151
2.
Benefit Claims and Misclassification: Vizcaino v. Microsoft and Its Progeny
1152
3.
Microsoft Inoculation Provision
1159
4.
DOL Fiduciary Claims: The Herman v. Time Warner Inc. Litigation
1162
5.
Leased Employees
1164
6.
Case Law Treatment of Leased Employees' Eligibility to Participate in a Service Recipient's Plans
1165
7.
Temporary and Seasonal Workers
1171
IV.
Worker Changes in Status: ERISA Section 510 Claims
1174
V.
Professional Employer Organizations: Who Is the Employer?
1176
VI.
Conclusion
1181
ch. 38
Civil RICO
1183
I.
Overview
1184
II.
Statutory Language
1184
18 U.S.C. [§]1962, Prohibited Activities
1184
18 U.S.C. [§]1961(1), Definition of Racketeering Activity
1185
18 U.S.C. [§]1961(3), Definition of Person
1186
18 U.S.C. [§]1961(4), Definition of Enterprise
1186
18 U.S.C. [§]1961(5), Definition of Pattern of Racketeering Activity
1186
18 U.S.C. [§]1964(c), Civil Remedies
1186
III.
Activities Prohibited by RICO
1186
IV.
RICO's Definitions
1187
A.
Racketeering Activity
1187
B.
Pattern of Racketeering Activity
1188
C.
Enterprise
1188
D.
Person
1188
V.
Elements of a Civil RICO Action
1188
A.
Identifying the Injury
1188
B.
Identifying the Racketeering Acts
1193
C.
Establishing a Pattern of Racketeering Activity
1194
D.
Identifying the Enterprise
1196
E.
Participation in the Enterprise
1201
F.
Conspiracy to Violate RICO
1203
G.
Aiding and Abetting a RICO Violation
1204
H.
Vicarious Liability
1205
I.
Time Limitations on Bringing Action
1205
J.
Arbitration of Civil RICO Claims
1207
K.
Effect of the McCarran-Ferguson Act
1207
ch. 39
Delinquency Actions
1209
I.
Overview
1210
II.
Statutory Language
1210
Erisa Section 502(a), Persons Empowered to Bring a Civil Action
1210
Erisa Section 515, Delinquent Contributions
1211
III.
Collection of Delinquent Contributions From Single Employers
1211
A.
Timely Payment of Appropriate Amount
1213
B.
Breach of Fiduciary Duty
1214
C.
Remedies
1216
D.
Parties to Prohibited Transactions
1216
IV.
Collection of Delinquent Employer Contributions Owed to Multiemployer Plans
1217
A.
The Agreement
1219
B.
Who Is Covered?
1223
C.
Is the Agreement in Effect?
1227
D.
The Right to Audit
1229
E.
Who Can Sue for Delinquent Contributions?
1231
F.
Who Can Be Sued for Delinquent Contributions?
1232
1.
Parties to Prohibited Transactions
1233
2.
Alter Egos, Single Employers, and Joint Employers
1233
3.
Individual Liability
1235
4.
Sureties
1237
G.
What Relief Can Be Recovered?
1237
H.
Other Collection Remedies
1243
1.
Federal Laws
1243
2.
State Laws
1244
I.
Statute of Limitations
1245
J.
Bankruptcy Considerations
1246
K.
Defenses
1250
L.
Burden of Proof
1254
V.
Withdrawal Liability
1256
ch. 40
Special Rules for Multiemployer Plans
1257
I.
Overview
1258
II.
Statutory Language
1261
Erisa Section 3, Definitions
1261
Erisa Section 502, Civil Enforcement
1262
Erisa Section 515, Delinquent Contributions
1263
Erisa Section 4001, Definitions
1263
Erisa Section 4069(b), Treatment of Transactions to Evade Liability; Effect of Corporate Reorganization
1264
Erisa Section 4201, Withdrawal Liability Established; Criteria and Definitions
1265
Erisa Section 4202, Determination and Collection of Liability; Notification of Employer
1265
Erisa Section 4203, Complete Withdrawal
1265
Erisa Section 4204, Sale of Assets
1266
Erisa Section 4205, Partial Withdrawals
1266
Erisa Section 4212, Obligation to Contribute
1267
Erisa Section 4213, Actuarial Assumptions
1268
Erisa Section 4218, Withdrawal Not to Occur Merely Because of Change in Business Form or Suspension of Contributions During Labor Disputes
1268
Erisa Section 4219, Notice, Collection, etc., of Withdrawal Liability
1269
Erisa Section 4221, Resolution of Disputes
1270
Erisa Section 4225, Limitation on Withdrawal Liability
1272
Erisa Section 4231, Mergers and Transfers Between Multiemployer Plans
1273
Erisa Section 4232, Transfers Between a Multiemployer Plan and a Single-Employer Plan
1274
Erisa Section 4234, Asset Transfer Rules
1274
Erisa Section 4301, Civil Actions
1275
III.
Complete and Partial Withdrawal
1276
A.
Identifying a Complete Withdrawal
1276
B.
Identifying a Partial Withdrawal
1280
IV.
Controlled Groups and Other "Employers"
1282
A.
The Pervasive Controlled Group Rule
1282
B.
Other Statutory and Nonstatutory Bases for "Employer" Status
1285
V.
Changes in Ownership and Other Transactional Issues
1288
A.
Stock Sales and Covered Reorganizations
1288
B.
Asset Sales
1289
C.
Other Possible Successorship Theories
1290
D.
Transactions to Evade or Avoid Liability
1291
VI.
Determining the Amount of an Employer's Withdrawal Liability
1292
A.
Determining the Plan's Unfunded Vested Benefits
1293
B.
Determining the Employer's Allocable Share of Unfunded Vested Benefits
1295
C.
Adjustments to the Employer's Allocable Share
1296
VII.
Dispute Resolution, Remedies, and Other Procedural Matters
1298
A.
Assessment of Withdrawal Liability
1298
B.
Mandatory Arbitration
1299
1.
Arbitration Proceedings
1299
2.
Judicial Review of Arbitration Awards
1300
3.
The Scope of Arbitral Jurisdiction
1301
C.
Interim Payments, Default, and Collection
1303
D.
Civil Actions
1306
E.
Bankruptcy Issues
1309
Appendix A
Erisa---U.S. Code Correspondence Table
1311
Table of Employee Retirement Income Security Act (ERISA) Sections
1323
Table of Cases
1329
Index
1455