Justia Government & Administrative Law Opinion Summaries

CareFirst, Inc., a nonstock, nonprofit Maryland corporation, is a holding company with two subsidiaries that provides health insurance for millions of Maryland residents. State law confers broad authority on the Maryland Insurance Commissioner to oversee its operation and adherence to its mission. This case arose from the termination of Leon Kaplan, a former executive of CareFirst. CareFirst declined to pay part of the post-termination compensation set forth in Kaplan's employment contract, reasoning that the compensation was not for "work actually performed," as that standard had been interpreted by the Commissioner. The Commissioner affirmed the decision not to pay the benefits, concluding that the payments would violate Md. Code Ann. Ins. 14-139. The Court of Appeals affirmed, holding (1) the Commissioner's determination was not preempted by ERISA; (2) the Commissioner's construction of the insurance code was legally correct; and (3) there was substantial evidence to support the Commissioner's determination in this case. View "Md. Ins. Comm'r. v. Kaplan" on Justia Law

Appellant was placed on disability leave from work. Appellant was covered under a long term disability (LTD) policy that her employer obtained from Medical Group Insurance Services (MGIS). The policy was written by Sun Life Assurance Company (Sun Life). After leaving her job, Appellant filed a claim with MGIS seeing long term disability benefits. Sun Life denied Appellant's request for benefits. Appellant filed an action against Sun Life, asserting various state law claims. The federal district court dismissed the action based on ERISA preemption. Appellant then amended her complaint to add ERISA claims and asked the district court to apply de novo review in its evaluation of her ERISA claims. The court denied the motion and granted summary judgment for Sun Life, concluding that Sun Life's decision to deny benefits was not arbitrary and capricious, and thus complied with ERISA's requirements. The First Circuit Court of Appeals vacated the judgment, holding (1) the safe harbor exception to ERISA did not apply to the policy covering Appellant, and therefore, Appellant's state law claims were preempted; but (2) the benefits denial was subject to a de novo review, rather than the highly deferential "arbitrary and capricious" review prescribed for certain ERISA benefits decisions. Remanded. View "Gross v. Sun Life Assurance Co. of Canada" on Justia Law

Like many Michigan municipalities, Pontiac has experienced significant economic difficulties, especially since 2008. Michigan’s Governor appointed Schimmel as Pontiac’s emergency manager. Acting under Michigan’s then-existing emergency manager law (Public Act 4), in 2011, Schimmel modified the collective bargaining agreements of Pontiac’s retired employees and modified severance benefits, including pension benefits, that Pontiac had given retirees not covered by collective bargaining agreements. The retired employees claim that Schimmel and Pontiac violated their rights under the Contracts Clause, the Due Process Clause, and the Bankruptcy Clause. The district court denied the retirees an injunction. The Sixth Circuit vacated and remanded for expedited consideration of state law issues. Michigan voters have since rejected Public Act 4 by referendum, which may have rendered Schimmel’s actions void.The court also questioned whether two-thirds of both houses of the Michigan Legislature voted to make Public Act 4 immediately effective. The court noted that similar issues face many Michigan municipalities. View "City of Pontiac Retired Emps. Ass'n v. Schimmel" on Justia Law

Plaintiff was a partner in a medical practice where she served as a staff anesthesiologist. When Plaintiff's dependence on opioids came to light, her employer had in force a group employee benefit plan, underwritten and administered by Union Security Insurance Company & Management Company for Merrimack Anesthesia Associates Long Term Disability Plan (USIC), which included long-term disability (LTD) benefits. When Plaintiff applied for those benefits, USIC refused to pay benefits past the point when Plaintiff was discharged from a treatment center, finding that Plaintiff's risk for relapse was not the same as a current disability. Plaintiff brought suit in the federal district court. The district court ultimately awarded Plaintiff LTD benefits for the maximum time available under the plan, concluding that categorically excluding the risk of drug abuse relapse was an unreasonable interpretation of the plan. The First Circuit Court of Appeals affirmed, holding that, in an addiction context, a risk of relapse can be so significant as to constitute a current disability. View "Colby v. Union Sec. Ins. Co." on Justia Law

Aetna Life Insurance Company, as the plan administrator, determined Sharon Wade was no longer disabled and stopped paying long-term disability benefits from Wade's former employer's welfare benefit plan. Wade sought judicial review of Aetna's decision by filing a civil action under ERISA. The district court granted summary judgment in favor of Aetna, concluding that Aetna did not abuse its discretion in terminating Wade's benefits because substantial evidence supported the decision. The Eighth Circuit Court of Appeals affirmed, holding that the district court (1) applied the appropriate standard of review; (2) gave appropriate weight to the Social Security Administration's grant of long-term disability benefits to Wade; and (3) did not abuse its discretion by determining substantial evidence supported Aetna's termination of benefits.

Respondent A&J Beverage Distribution, Inc. appealed decisions of the Department of Labor (DOL) brought under the Whistleblowers' Protection Act by Petitioner Kevin Perrier. Petitioner worked for A&J as a truck driver. When he first started working, Petitioner did not participate in the company health plan. When premiums increased, Petitioner opted out of the plan. In 2009, rates decreased, and Petitioner claimed he was not informed of the decrease. When he sought information on the plan at that time, the company refused to give it to him. Petitioner notified the company that he had contacted the federal Department of Labor to learn more about his rights under ERISA with regard to notification of the company health plan. A&J then gave Petitioner the requested information, but shortly thereafter, he was terminated. The New Hampshire DOL hearing officer ruled that Petitioner "sustained his burden of proof to show that he was discharged in retaliation for having exercised his legitimate rights under the law." On appeal, A&J asserted preemption: that the whistleblower claim was preempted by ERISA. Upon review, the Supreme Court vacated the DOL's decision: "while the petitioner correctly notes that state and federal courts have concurrent jurisdiction over actions... his whistleblower claim is not such an action. ... [the Court] reject[ed] the petitioner's argument that DOL had jurisdiction over the petitioner's ERISA claim."

DIRECTV sold business segments. In 1997 it sold defense units to Raytheon, transferring $5,774,655,148 in pension assets and $3,310,028,559 in pension liabilities, a net transfer of $2,464,626,589 in surplus pension assets. In a 2000 sale of satellite business units to Boeing, DIRECTV transferred $1,843,930,981 in pension assets and $1,037,344,156 in liabilities, a net transfer of $806,586,825 in surplus assets. In both transactions, DIRECTV retained a small portion of surplus pension assets. The Government asserted noncompliance with Cost Accounting Standard 413.50(c)(12) (41 U.S.C. 422(f)(1)), which regulates assignment of actuarial gains and losses, valuation of assets of a pension fund, and allocation of pension costs to a contractor’s business segments, and demanded payments of $68,695,891 and of $12,197,704. The Court of Federal Claims granted DIRECTV summary judgment. The Federal Circuit affirmed. The claims court correctly determined that DIRECTV's segment closing obligations could be satisfied by cost savings realized by the Government in successor contracts. The court rejected arguments that the trial court erred by calculating segment closing adjustments based on assets and liabilities of the entire segment, rather than only assets and liabilities that DIRECTV retained and that the Federal Acquisition Regulation required DIRECTV itself to pay any amount due as a segment closing adjustment.

Appellant appealed the district court's grant of summary judgment in favor of Sun Life in an Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001 et seq., benefits case. At issue was whether Sun Life was entitled to offset from appellant's employer-provided long-term disability benefits the amount that appellant received in Department of Veterans Affairs (VA) benefits each month. The court held that VA benefits, for a wartime service-related disability, as a matter of statutory construction, did not derive from an act that was "similar to" the SSA or RRA, which were both federal insurance programs based upon employment and the amount of an award under their terms depended upon how much had been paid in. Accordingly, the court reversed and remanded to the district court with directions to enter judgment in favor of appellant.