The Supreme Court, whose new term begins today, the first Monday in October, will consider a number of cases impacting employee benefits and benefits litigation.  This is the first in a series analyzing these cases as they are heard by the Court.  The first issue up concerns prescription drug benefit regulation, and later in the series, we will address the hot button issue of the constitutionality of the Affordable Care Act, benefits for railroad workers, and considerations when including arbitration provisions in benefit plans.

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A little more than one year ago, we reported on a settlement (Cassell et al. v. Vanderbilt University, et al.) involving the alleged wrongful use of personal information belonging to retirement plan participants, claimed to be “plan assets.” This year, similar claims have been made against Shell Oil Company in connection with its 401(k) plan. Retirement plan sponsors may begin seeing more of these claims and they might consider some strategies to head them off.

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As the circuit courts continue to define the pleading standards for fiduciary breach claims challenging investments in defined contribution plans, the Eighth Circuit affirmed in part and reversed in part a district court’s finding that a group of 403(b) plan participants failed to state such a claim.  In Davis v Washington University, plaintiffs alleged that plan fiduciaries breached their ERISA fiduciary duties by maintaining a mixed array of retail and institutional share classes in the plan’s line up and including three specific investment options in the plan that underperformed and cost more than other allegedly comparable funds available on the market.    The district court dismissed the claims entirely.

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The plaintiffs’ expectations surely suffered a blow after reading the Supreme Court’s initial observation in their case: “If [the plaintiffs] were to lose this lawsuit, they would still receive the exact same monthly benefits that they are already slated to receive, not a penny less. If [the plaintiffs] were to win this lawsuit, they would still receive the exact same monthly benefits that they are already slated to receive, not a penny more.” Thole v. U. S. Bank N. A., more…

Background

On March 27, 2020, the Eighth Circuit in Sanzone v. Mercy Health, 2020 U.S. App. LEXIS 9537 (8th Cir. March 27, 2020), ruled on several key issues on the “church plan” exemption to ERISA.  As background, beginning in 2013, plaintiff’s counsel filed ERISA class-action cases across the country challenging the application of ERISA’s “church plan” exemption to non-profit church-affiliated hospital organizations.   In 2017, the Supreme Court ruled in Advocate Health Care Network v. Stapleton, 137 S. Ct. 1652 (2017), that ERISA’s “church plan” exemption includes plans maintained by a church-affiliated organization whose principal purpose is the funding or administration of that plan. This meant that plans of non-profit church-affiliated hospitals, social service organizations, schools and the like could qualify for this exemption if they meet these statutory requirements.

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In a closely watched decision, Intel Corporation Investment Policy Committee v. Sulyma, Slip Op. No. 18-1116 (U.S. S. Ct., Feb. 26, 2020), construing ERISA’s three-year statute of limitations, see ERISA § 413(2), 29 U.S.C. § 1113(2), the Supreme Court held unanimously (J. Alito) that “actual knowledge” means “. . . when a plaintiff actually is aware of the relevant facts, not when he should be.”

Read the full article at Jackson Lewis Benefits Law Advisor Blog.