Employee Retirement Income Security Act (ERISA)
 Expansive Remedies under ERISALaRue v. DeWolff, Boberg & Associates, Inc.No. 06-856 Supreme Court of the United States
NCLC urged the High Court to uphold a Fourth Circuit decision addressing two issues: 1) whether a participant in a defined contribution pension plan may sue to recover losses to the plan caused by a breach of fiduciary duty, even when those losses affected only the participant's individual account; and 2) whether an action by a plan participant against a fiduciary to recover losses caused by a breach of duty seeks "equitable relief" for purposes of ERISA Section 502(a)(3). In its brief, NCLC argued that judicial expansion of ERISA remedies beyond what Congress intended would encourage more litigation, and impose unpredictable costs on employers and other plan sponsors.
Amicus brief filed 9/11/07. Oral argument to be held 11/26/07.
Cash Balance Pension Plan Requirements under ERISA
Hirt v. Equitable Retirement Plan
No. 06-4757 (L)
U.S. Court of Appeals for the Second Circuit
NCLC urged the Second Circuit to uphold a district court's decision finding Equitable's cash balance pension plan did not violate the age discrimination prohibition under ERISA. The lower court also correctly held that participants were time-barred from challenging a plan amendment contained in the summary plan description document, distributed to participants eight years prior to the initiation of the lawsuit. In its brief, NCLC argued that a summary plan description can satisfy the notice requirements under ERISA, and that statute of limitations must be strictly adhered to in challenging the legality of a plan amendment in this case.
 Terminating Pension Plans under ERISA
Beck v. Pace International Union, et al. No. 05-1448 Supreme Court of the United States
NCLC urges the Supreme Court to overturn a Ninth Circuit decision holding that a pension plan sponsor breached its fiduciary obligations under ERISA in determining to terminate a plan by purchasing an annuity rather than merging the pension plan with a multiemployer pension plan, as urged by the union. In its brief, NCLC argued that if the Ninth Circuit's decision were allowed to stand it would expose employers, whether in or out of bankruptcy, to fiduciary liability for business decisions regarding the creation, modification or termination of an employee benefit plan and would undermine and weaken the protections that the Pension Benefit Guaranty Corporation provides to employers.
Amicus brief filed 3/5/07. Decision 6/11/07.  View brief  Multiemployer Withdrawal Liability for Successor Companies
Chicago Truck Drivers, et al. v. El Paso CGP Co., et al.
Nos. 06-3362, 06-3397, 06-4040 U.S. Court of Appeals for the Seventh Cirucit The Seventh Circuit refused to consider NCLC's brief seeking reversal of a district court decision holding a company can be held responsible for its former business unit's withdrawal liability under a multiemployer pension plan without proper notice. In its brief, NCLC argued that the opportunity to challenge withdrawal liability should not be waived based on a boilerplate proof of claim filed in bankruptcy court that does not meet the statutory notice requirements. This case raises serious risks for all companies that have engaged or will engage in business acquisitions or dispositions, whether through stock sales, mergers, spin-offs or asset sales. Businesses need workable rules specifying when they can be liable for the subsequent withdrawals of their former business units that go into bankruptcy. Amicus brief filed 2/22/07. Decision 2/27/07. View briefStanding to Bring ERISA Class Actions in Stock Drop Cases
Wangberger v. Janus Capital Group Inc., et al.No. 06-2003 U.S. Court of Appeals for the Fourth Circuit NCLC urged the Fourth Circuit to affirm a lower court ruling that a former employee who has taken a full distribution of his retirement benefits has no standing to bring a claim for losses to a defined contribution plan due to an alleged breach of fiduciary duty under ERISA. The plaintiffs of four consolidated district court cases were all participants in their respective employers' 401(k) retirement plans, left their employment, and voluntarily withdrew their entire benefit from the plans. They thereafter filed putative class actions, alleging that the plans' fiduciaries had committed fiduciary breaches under ERISA by allowing participants to invest in mutual funds that had engaged in "market timing." In its brief, NCLC argued that former participants of a retirement plan have no interest in the long-term survival of the plan or how costly it may become for the employer to maintain it, and therefore have no standing to bring actions on the plan's behalf. Amicus brief filed 2/15/07. Oral argument to be held 12/5/07. View briefERISA and Cash Balance Pension Plans
Register, et al. v. PNC Financial Services Group
No. 05-5445 U.S. Court of Appeals for the Third Circuit The Third Circuit agreed with NCLC and affirmed the lower court's ruling in favor of the defendants, finding that PNC's conversion of a "defined benefit" pension plan to a "cash balance" plan did not violate the anti-back loading or age discrimination provisions of the Employee Retirement Income Security Act (ERISA) of 1974. The court of appeals held that the amount that PNC put into each employee's retirement account was the same regardless of age, and therefore was not discriminatory. Amicus brief filed 4/10/06. Oral argument held 12/14/06. Decision 1/30/07.
NCLC urges the Fourth Circuit Court of Appeals to uphold the district court ruling rejecting Maryland's Fair Share Act, also known as the "Wal-Mart" law, because it was preempted by the Employee Retirement Income Security Act (ERISA). The law would have required large employers to earmark a percentage of payroll spending for health care costs or divert an equal amount of money into a fund to supplement the state's Medicaid budget. The Maryland General Assembly enacted the Fair Share Act in January 2006 which would have applied only to for-hire employers with more than 10,000 employees, criteria met only by Wal-Mart.
Amicus brief filed 11/7/06. Oral argument held 11/30/06. Decision 1/17/07.
Lifetime Retiree Benefits under Collective Bargaining Agreement
El Paso Tennessee Pipeline Co. v. Yolton, et al. No. 06-201 Supreme Court of the United States The Supreme Court declined to review a Sixth Circuit decision holding that there is an inference that parties to a collective bargaining agreement intend for retiree benefits to vest for life. A group of retirees filed this class action lawsuit seeking fully funded lifetime retiree benefits. NCLC argued the Sixth Circuit decision to grant fully funded lifetime benefits to these retirees frustrates the purposes of the National Labor Relations Act and the Employee Retirement Income Security Act, violating the principles of federal labor law and national uniformity intended under both statutes. Amicus brief filed 10/5/06. Cert. denied 11/6/06.
District Court Rejects Wal-Mart Law in Maryland
Retail Industry Leaders Association v. James D. Fielder, Jr. No. 1:06-cv-00316-JFM United States District Court for the District of Maryland The U.S. District Court for the District of Maryland agreed with NCLC and rejected Maryland's Fair Share Act, also known as the "Wal-Mart" law, because it was preempted by the Employee Retirement Income Security Act (ERISA). The law would have required large employers to earmark a percentage of payroll spending for health care costs or divert an equal amount of money into a fund to supplement the state's Medicaid budget. The Maryland General Assembly enacted the Fair Share Act in January 2006 which would have applied only to for-hire employers with more than 10,000 employees, criteria met only by Wal-Mart. Amicus brief filed 3/06/06. Decision 7/19/06. View brief View decision
ERISA and Right To Recover Financial Payments
Sereboff v. Mid-Atlantic Medical Services, Inc.
No. 05-260
Supreme Court of the United States
The Supreme Court affirmed a Fourth Circuit decision allowing third-party healthcare fiduciaries the right to recover payments made to health plan beneficiaries based on Employee Retirement Income Security Act (ERISA) provisions. In this case, the healthcare provider, MAMSI, paid $75,000 in medical claims for the Sereboffs, who were injured in an auto accident and later recovered $750,000 in personal injury claims in California courts. The Supreme Court adopted NCLC's argument that a health plan administrator may seek equitable restitution and impose a trust or equitable lien on a portion of settlement funds that are within possession and control of the participant.
Amicus brief filed 2/23/06. Oral argument held 3/28/06. Decision 5/15/06.
Federal Preemption of State Regulation of Pharmacy Benefit Managers (PBMs)
Pharmaceutical Care Management Association v. Rowe
No. 05-1297
Supreme Court of the United States
NCLC urges the Supreme Court to overturn a First Circuit decision upholding a Maine law imposing a fiduciary duty on PBMs in their relationships with their customers and requiring PBMs to disclose financial information to clients. PBMs function as intermediaries between the health care benefit providers and pharmaceutical manufacturers and pharmacies and negotiate reduced drug costs by contracting for rebates from manufacturers on bulk purchases. NCLC argued that the Maine statute is preempted by federal law because it directly relates to employee benefit plans under ERISA. Additionally, NCLC warned that the administrative burdens placed on PBMs in Maine will ultimately increase the price of prescription drugs to customers.
Amicus brief filed 05/12/06.
ERISA and Employer-Funded Pension Plans
Yolton, et al. v. El Paso Tennessee Pipeline Co., et al.
No. 04-1821, 04-2492
U.S. Court of Appeals for the Sixth Circuit
NCLC urges the Sixth Circuit to grant rehearing en banc to review a panel decision holding that there is an inference that parties to a collective bargaining agreement intend for retiree benefits to vest for life. A group of retirees filed this class action lawsuit seeking fully funded lifetime retiree benefits. NCLC argues that the panel's decision to grant fully funded lifetime benefits to these retirees frustrates the purposes of the Employee Retirement Income Security Act (ERISA) and the National Labor Relations Act (NLRA), violating the principle of national uniformity intended under both statutes and violating principles of federal labor law.
Further, NCLC argues that the panel's decision in this case and in UAW v. Yard-Man, Inc., 716 F.2d 1476 (6th Circuit 1983) create an intra-circuit conflict on the issue of vesting of collectively bargained retiree benefits. This encourages forum shopping to the detriment of businesses with corporate offices and plan administration outside of the Sixth Circuit.
Amicus brief filed 03/6/06. Decision 5/9/06.
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ERISA and Cash Balance Pension Plans
Register, et al. v. PNC Financial Services Group
No. 05-5445
U.S. Court of Appeals for the Third Circuit
The lower court ruled in favor of the defendants, finding that PNC's conversion of a "defined benefit" pension plan to a "cash balance" plan didn't violate the anti-backloading or age discrimination provisions of the Employee Retirement Income Security Act (ERISA) of 1974. In its brief, NCLC points out that the lower court got it right: employers such as PNC who convert to cash balance pension plans do so for valid, nondiscriminatory reasons.
Amicus brief filed 4/10/06.
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Defending Against Attack on Cash Balance Plans
IBM v. Cooper
No. 05-3588
U. S. Court of Appeals for the Seventh Circuit
Pointing out that cash balance plans have positive attributes over traditional pension plans for both employees and employers and that invalidating cash balance plans will have drastic consequences for the nation's retirement system, NCLC argues that the district court's conclusion that cash balance plans violate ERISA's prohibition on age discrimination is based on a plan feature that both the IRS and the 7th Circuit have determined is required. NCLC argues that that the district court's interpretation of ERISA conflicts with another decision by the 7th Circuit, is incompatible with the rest of the law, and produces an irrational result. This is the first case in which a federal court has invalidated a cash balance plan based on ERISA's prohibition against age discrimination.
Amicus brief filed 11/2/05 along with motion for leave to file. Cert. denied 11/08/05.
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ERISA Liability for Pension Investment Decisions
Langbecker, et al. v. Electronic Data Systems Corporation, et al.
No. 04-41760
U. S. Court of Appeals for the Fifth Circuit
Following a fall in the EDS stock price during the market-wide drop in technology stocks in 2000, plaintiffs filed a class action lawsuit claiming that EDS and others violated ERISA by offering EDS stock as an investment option under the EDS 401(k) plan. Among other things, the lower court held that because this case was brought as a class action on behalf of the Plan, neither the releases signed by individual plaintiffs nor section 404(c) of ERISA, which made the plan participants responsible for their own 401(k) investment decisions, applied to the case. On an interlocutory basis, the 5th Circuit agreed to review these and other rulings. NCLC argued that both the releases signed by plaintiffs and the 404(c) defense bar a recovery by the plaintiffs in the case. NCLC also pointed out that the lower court rulings serve to undermine the favored status federal law confers on participant-directed investment in company stock via 401(k) plans.
Amicus brief in support of defendants/appellants filed 3/8/05. Decision 1/18/07.
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ERISA Preemption
Aetna Health, Inc. v. Davila
No. 02-1845
U. S. Supreme Court
As urged by NCLC, the Supreme Court agreed to review a decision by the Fifth Circuit that allows plaintiff to proceed with a state law tort claim against a managed care company. In this case the plaintiff sued his HMO for negligence, alleging that his physician had recommended Vioxx for arthritis pain, but that the company "refused to provide Vioxx." Under the plaintiff's health benefit plan, he was required to try an analogous but less expensive drug before the company would authorize payment for Vioxx. In the alternative, he could file for an exception. Neither the plaintiff nor his physician filed for an exception, and plaintiff now claims that taking the analogous, less expensive drug injured him.
Amicus brief in support of petition for cert. filed 8/22/03. Cert. granted 11/3/03.
Fiduciary Liability under ERISA
Peterson v. Connecticut General Life Insurance Company
No. 00-4297
U.S. Court of Appeals for the Third Circuit
NCLC urged the court to reject Peterson's claim that she is entitled to damages and injunctive relief under the Employee Retirement Income Security Act (ERISA) because her HMO violated what she argued is a fiduciary duty to automatically disclose its use of widely used physician incentives and guidelines, even though she never requested the information nor was she ever refused or provided with inadequate healthcare or denied a reimbursement for healthcare expenditures. Peterson voluntarily withdrew her claim before the court could rule on the merits of the case.
Amicus brief in support of the defendant-appellee filed 3/29/01. Notice of voluntary dismissal filed 05/31/01.
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