Justia Government & Administrative Law Opinion Summaries

Business groups challenged the “Fiduciary Rule” promulgated by the Department of Labor (DOL) in April 2016. The Rule is a package of seven different rules that broadly reinterpret the term “investment advice fiduciary” and redefine exemptions to provisions concerning fiduciaries that appear in the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001, and the Internal Revenue Code, 26 U.S.C. 4975. The business groups alleged the Rule’s inconsistency with the governing statutes; DOL’s overreaching to regulate services and providers beyond its authority; DOL’s imposition of legally unauthorized contract terms to enforce the new regulations; First Amendment violations; and the Rule’s arbitrary and capricious treatment of variable and fixed indexed annuities. The Fifth CIrcuit vacated the district court’s rejection of all of those challenges. DOL’s interpretation of “investment advice fiduciary” relies too narrowly on a purely semantic construction of one isolated statutory provision and wrongly presupposes that the statutory provision is inherently ambiguous. Congress intended to incorporate the well-settled meaning’” of “fiduciary.” In addition, the Fiduciary Rule renders the second prong of ERISA’s fiduciary status definition in tension with its companion subsections. DOL therefore lacked statutory authority to promulgate the Rule with its overreaching definition of “investment advice fiduciary.” View "Chamber of Commerce of the USA v. United States Department of Labor" on Justia Law

Cincinnati ordinances provide guidelines for selecting the “lowest and best bidder” on Department of Sewers projects to “ensure efficient use of taxpayer dollars, minimize waste, and promote worker safety and fair treatment of workers” and for bids for “Greater Cincinnati Water Works and the stormwater management utility division,” to employ skilled contractors, committed to the city’s “safety, quality, time, and budgetary concerns.” Allied alleged that the Employee Retirement Income Security Act (ERISA) preempted: a requirement that the bidder certify whether it contributes to a health care plan for employees working on the project as part of the employee’s regular compensation; a requirement that the bidder similarly certify whether it contributes to an employee pension or retirement program; and imposition of an apprenticeship standard. Allied asserts that the only apprenticeship program that meets that requirement is the Union’s apprenticeship program, which is not available to non-Union contractors. The ordinances also require the winning contractor to pay $.10 per hour per worker into a city-managed pre-apprenticeship training fund, not to be taken from fringe benefits. The district court granted Allied summary judgment. The Sixth Circuit reversed. Where a state or municipality acts as a proprietor rather than a regulator, it is not subject to ERISA preemption. The city was a market participant here: the benefit-certification requirements and the apprenticeship requirements reflect its interests in the efficient procurement of goods and services. View "Allied Construction Industries v. City of Cincinnati" on Justia Law

After Employee ended his employment with Employer he applied for and received state unemployment benefits from the Department of Employment and Economic Development (DEED) and supplemental unemployment benefits (SUB) through a plan offered by Employer. DEED determined that the SUB plan payments counted as “wages” under Minn. Stat. 268.035(29)(A) and determined that Employee had been overpaid state unemployment benefits. An unemployment law judge affirmed. The court of appeals reversed, concluding that Employee was entitled to keep the state unemployment benefits. The Supreme Court affirmed, holding the SUB plan payments Employee received were not “wages” for purposes of his eligibility for state unemployment benefits, and therefore, Employee was not overpaid state unemployment benefits. View "Engfer v. Gen. Dynamics Advanced Info. Sys., Inc." on Justia Law

Nationwide, with 32,000 employees in 49 states, has an ERISA employee-benefits plan that provides short-term disability (STD), long-term disability (LTD), and “Your Time” benefits. An employee can receive Your Time benefits for personal reasons, such as vacation or illness. To receive STD benefits, an employee must be “STD Disabled,” which means “a substantial change in medical or physical condition due to a specific illness that prevents an Eligible Associate from working their current position.” Specific rules govern maternity leave. The first five days of paid maternity leave come out of an associate’s Your Time benefits. Thereafter, a new mother is considered STD Disabled and entitled to STD benefits for six weeks following a vaginal delivery, or eight weeks following a cesarean section. Wisconsin’s Family Medical Leave Act requires that employers allow six weeks of unpaid leave following “[t]he birth of an employee’s natural child[.]” The Act’s “substitution provision” requires employers to allow an employee to substitute “paid or unpaid leave of any other type provided by the employer” for the unpaid leave provided by the statute. A Wisconsin Nationwide employee had a baby. She received six weeks of STD benefits under Nationwide’s plan. She then requested an additional period of STD benefits pursuant to the substitution provision. The plan denied the request, finding that she was no longer short-term disabled under the plan. The Wisconsin Supreme Court had held that, ERISA did not preempt the Wisconsin Act. The district court held that, under the Supremacy Clause, the administrator was required to comply with ERISA rather than the Wisconsin Act. The Sixth Circuit affirmed.View "Sherfel v. Newson" on Justia Law

Plaintiff Lucrecia Carpio Holmes appealed a district court’s ruling that her claim for disability benefits under the Employee Retirement Income Security Act (ERISA) was barred due to her failure to exhaust administrative remedies. Finding no reversible error, the Tenth Circuit affirmed. View "Holmes v. Colorado Coalition" on Justia Law

Plaintiff received coverage under Johnson & Johnson’s Long-Term Disability Plan while working for a subsidiary of Johnson & Johnson. Later, Johnson & Johnson and Medical Card System, Inc. (together, Appellees) terminated Plaintiff’s long-term disability benefits. The district court upheld the denial, holding that the plan administrator had ample basis for finding Plaintiff did not cooperate fully during the Functional Capacity Examination (FCE) and was thus ineligible for continuing benefits. Plaintiff again appealed, arguing, among other things, that the plan administrator abused its discretion in crediting an examination by a physical therapist over the opinion of his treating physician. The First Circuit Court of Appeals affirmed, holding (1) the plan administrator’s finding that Plaintiff was uncooperative during his final FCE was supported by substantial evidence, and therefore, the administrator’s decision to terminate Plaintiff’s long-term disability benefits was neither arbitrary nor capricious; and (2) the administrator did not abuse its discretion in determining whether there existed grounds for termination of Plaintiff’s benefits. View "Ortega-Candelaria v. Johnson & Johnson" on Justia Law

Plaintiff was hired by Employer in 1983. Plaintiff was covered by a short-term disability plan, and the Life Insurance Company of North America (“LINA”) had the authority to decide questions of eligibility for coverage or benefits under the plan. After Plaintiff underwent back surgery in 2009, LINA at first granted but then denied Plaintiff disability benefits. In 2010, Plaintiff sued LINA, Employer, and others in Puerto Rico court, seeking review of the benefits denial. LINA later removed the action to the District of Puerto Rico. Ultimately, the district court (1) found LINA’s decision was not arbitrary and capricious because Plaintiff failed to produce sufficient medical evidence of disability, and (2) dismissed Plaintiff’s claim against Employer for failure to plead it with specificity. Plaintiff appealed. The First Circuit Court of Appeals dismissed Plaintiff’s appeal on procedural grounds because Plaintiff committed numerous procedural errors, which precluded intelligent review. View "Gonzalez-Rios v. Hewlett Packard PR Co." on Justia Law

In the early 2000s, Raytheon underwent a major reorganization, including the sale of several business segments, including AIS, Optical, and Aerospace (segments at issue). As part of each sale, Raytheon retained the assets and liabilities of defined-benefit pension plans associated with the segments. Raytheon also calculated segment closing adjustments as required by CFR Cost Accounting Standards (CAS). Raytheon determined that some of its segments had pension surpluses, but the segments at issue had deficits. Although Raytheon paid the government its share of the surpluses, the government refused to pay its share of the deficits. Raytheon submitted certified claims for recovery of the deficits under the Contract Disputes Act, 41 U.S.C. 7103 (2011). The contracting officer issued final decisions denying these claims, reasoning that the adjustments were subject to the Federal Acquisition Regulation’s timely funding requirement, 48 CFR 31.205-6(j)(2)(i), and the deficits were therefore unallowable because Raytheon failed to fund the full amount of the pension deficits in the same year as the closings and that Raytheon’s segment closing calculations “do[] not comply with CAS 413[.]” The Claims Court awarded Raytheon $59.209,967 and rejected a claim for recovery with respect to one segment, finding that Raytheon applied the wrong asset allocation method in its adjustment calculation. The Federal Circuit affirmed.View "Raytheon Co. v. United States" on Justia Law

At issue in this case was whether ERISA preempted claims made under two Washington state laws designed to ensure that workers on public projects are paid for their work: chapters 39.08 and 60.28 RCW. When the Washington Supreme Court previously addressed this issue in 1994 and 2000, it held that ERISA preempted such claims. As a result of this conflict between Washington's rule and the rule followed by federal courts, the outcome of this type of case in Washington was entirely dependent on whether the lawsuit was filed in federal or state court. This has led to forum shopping, and created inconsistent and unjust results for parties in Washington. In light of the national shift in ERISA preemption jurisprudence and the persuasive reasoning underlying that shift, the Washington Court, through this opinion, joined courts across the country and held that this type of state law was not preempted by ERISA. View "W.G. Clark Constr. Co. v. Pac. Nw. Reg'l Council of Carpenters" on Justia Law

A Vermont statute requires all "health insurers" to file with the State reports containing claims data and other "information relating to health care." Liberty Mutual sought a declaration that the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. 1001 et seq., preempted the Vermont statute and regulation. The district court granted summary judgment in favor of Vermont. The court held that the reporting requirements of the Vermont statute and regulation have a "connection with" ERISA plans and were therefore preempted as applied. The court's holding was supported by the principle that "reporting" is a core ERISA function shielded from potentially inconsistent and burdensome state regulation. Accordingly, the court reversed and remanded with instructions to enter judgment for Liberty Mutual. View "Liberty Mutual Ins. Co. v. Donegan" on Justia Law