Fairness Finding Was Not Clearly Erroneous
WILLIAMS v. ROHN AND HAAS PENSION PLAN (September 2, 2011)
In 2002, Gary Williams filed a class action against the Rohm and Haas Pension Plan, alleging that his lump-sum distribution should include cost-of-living adjustments. The district court granted summary judgment to the class. The Seventh Circuit affirmed and remanded for a damages calculation. On remand, the Plan took the position that class members who took early retirement were entitled to no damages. The parties reached a settlement before the issue was adjudicated. One group of class members objected to the settlement on the ground that it discriminated against early retirees, who (they maintained) should have been given separate counsel. The group also objected to the amount of fees awarded. Another objector claimed that the settlement released his unrelated claims and that he should have been allowed to opt out. Judge Barker (S.D. Ind.) approved the settlement. The objectors appeal.
In their opinion, Seventh Circuit Judges Bauer, Kanne, and Evans (who, as a result of his death, took no part in the decision) affirmed. First, the Court affirmed the district court's fairness finding with respect to the early retirees. The Court noted that the early retirees received $60 million as part of the settlement on a claim that rested on unsettled law. The district court had already heard arguments on the issue and was well positioned to assess the settlement's fairness. Her decision was not clearly erroneous. Likewise, her decision not to create a separately represented subclass was not an abuse of discretion. With respect to the individual objector, the Court concluded that the settlement only released pension plan related claims. The district court did not abuse its discretion in denying his opt out. Finally, with respect to the fee award, the Court stated that, given the district court's application of the correct methodology and intimate familiarity with the litigation, it did not abuse its discretion in the fee award.
Lisa Pakovich became disabled during her employment with .jpg)
Jacklin Jones was injured in a car accident in 2001. Over the course of the next several years, she sought medical treatment as her condition worsened. She complained of lower back pain and numbness in her hands. The objective medical evidence, including the results of multiple MRIs, identified the principal problem as a mild, lower- back disc bulge. Her orthopedic surgeon advised her to discontinue the strong pain medication and instead to lose weight and begin physical therapy. She quit her job in November of 2003 because of her pain. She continued to see the orthopedic surgeon, who continued to tell her to lose weight and get into better condition. Jones sought disability benefits. At her hearing, she testified that she was in substantial pain, that she could not sit or stand for long periods, that her pain medication made her drowsy and nauseous, and that she had trouble holding onto objects. A vocational expert, responding to the ALJ's hypotheticals, testified that there were over 3000 jobs available for a person with Jones' conditions. The ALJ concluded that Jones was not disabled, finding that she could perform simple, routine, sedentary work. In reaching that conclusion, the ALJ found Jones' testimony about the intensity of her pain not credible. Judge Randa (E.D. Wis.) concluded that substantial evidence supported the decision and affirmed. Jones appeals..jpg)
Until 2007, O’Neill Bros. Transfer & Storage took part in a multi-employer pension fund administered by the .jpg)
Norman Blanco was hired by Porsche Engineering Services in April of 2005. After one month of employment, he was covered by Porsche's benefit plan. The plan included both short and long term disability benefits. Blanco suffered a heart attack in July and, by the end of August, was no longer able to work. The long-term disability plan had a pre-existing condition exclusion. It precluded coverage for conditions for which the beneficiary, in the three months prior to his coverage effective date, had either a) received care or took medication or b) had symptoms for which a prudent person would have sought care. Pursuant to the pre-existing condition exclusion, Prudential denied Blanco's claim for long-term benefits. Blanco filed an ERISA suit. Judge McKinney (S.D. Ind.) granted summary judgment to Prudential.
Kirsten Majeski was a nurse consultant for Metropolitan Life Insurance Co. ("MetLife"). Her typical workday involved sitting at a desk, using a phone and computer. In 2006, she was diagnosed with cervical radiculitis, a compression in the upper spinal. MetLife originally approved short-term disability benefits. It later determined that Majeski was not entitled to benefits, concluding that her impairment did not prevent her from performing her job. Majeski appealed and submitted medical evidence from her doctor and physical therapist. The conclusion of the medical evidence was that she had difficulty sitting and using her hands -- and was thus unable to perform her job. MetLife had a physician review the records. He concluded that there were "minimal objective findings" to support the suggested limitations. MetLife rejected the appeal. Majeski brought suit under ERISA. The district court granted summary judgment to MetLife. Majeski appeals.
Sandra Rudzinski was an active employee of Sharp Electronics when she began experiencing fatigue and headaches. As a Sharp employee, she participated in its disability plan. Under the plan, Sharp paid short-term benefits during an initial 180-day period and Metropolitan Life Insurance Company ("MetLife") paid long-term benefits. Sharp paid premiums to MetLife on behalf of its employees. Rudzinski received short-term benefits from Sharp and applied for long-term benefits from MetLife. MetLife denied her application, first on the ground that she had a pre-existing disability and later on the ground that she had not completed the 180 days of short-term benefits. Rudzinski sued MetLife under ERISA. During the litigation, MetLife told Rudzinski that MetLife also denied her benefits because Sharp stopped remitting premium payments after her employment ended. She added Sharp as a defendant. She accused Sharp of interfering with her benefits, violating fiduciary duties, and for telling her that she could maintain her benefits by obtaining a conversion policy. Sharp cross-claimed against MetLife, alleging breach of fiduciary duty, equitable estoppel and indemnity. Rudzinski voluntarily dismissed her claim against Sharp and the court entered judgment in her favor in her claim against MetLife, leaving only Sharp's cross-claim. Sharp filed an amended complaint, alleging breach of fiduciary duty under ERISA, indemnification, negligence, negligent inducement, negligent misrepresentation, abuse of process and common-law breach of fiduciary duty. The court granted MetLife's motion to dismiss, concluding that MetLife had not breached a fiduciary duty and that the state law claims were preempted by ERISA. Sharp appeals.
Years ago, Michael Marrs developed a psychiatric condition that forced him to leave his job at Motorola and go on disability leave. Six years after he started his leave, Motorola amended its disability plan. It imposed a two-year limit on disability benefits resulting from mental, rather than physical, conditions. Marr's benefits were terminated by Motorola two years after the amendment. Marrs brought a class action under ERISA. The district court granted summary judgment to Motorola. Marrs appeals..jpg)
Michael Daugherty worked for Wabash Center, Inc. for seven years. He had an excellent employment record. He was promoted on several occasions and always received positive reviews. Things changed in 2006. He started having trouble with his coworkers and his staff. He was given a written reprimand for abusive e-mails and unacceptable management style. Permission for a month-long vacation was revoked. Daugherty immediately visited his doctor and requested two weeks FMLA leave from the Center. His request was granted. In his absence, the Center discovered that he had used the Center's credit card to make at least five unauthorized purchases. It also discovered that he had failed to follow through on some key responsibilities. When Daugherty was due back from his leave, the Center presented him with a corrective action plan -- which he refused to sign. He instead requested additional medical leave. The Center granted his request but asked that he not access the network while on leave and asked him for his keys and passwords. He refused. After further analysis revealed that he had deleted thousands of files while on leave, the Center fired him. Daugherty filed suit, alleging a violation of the FMLA. The court granted summary judgment to the Center. Doherty appeals..jpg)
After five years as a programmer with Stein Roe, Bruce Fischer complained of memory loss and problems with his attention. He applied for and received short-term disability benefits. A few months later, he submitted a claim for long-term benefits. The three medical reports he submitted with his application contained diagnoses of severe or profound depression. The plan administrator approved his application but informed him of the plan's 24-month maximum benefit period for mental illnesses, including depression. After the 24 months, the plan discontinued Fischer's benefits. Fischer continued to see additional medical personnel during the period of the plan's evaluation and his appeal. In all, at least thirteen physicians reviewed Fischer’s case. There was disagreement among the physicians as to whether Fischer's condition was organic or psychological. Fischer brought an action under ERISA for reinstatement of benefits. The district court granted summary judgment to the plan administrator. Fischer appeals.
Nancy Love had worked at National City for over twenty years when she was diagnosed with multiple sclerosis. After almost 3 years of receiving long-term disability benefits, the Plan told her she no longer fit their definition of "disabled." The controlling definition, after two years of long-term disability, is that a claimant must not be able to perform any job for which she is or could be qualified. The Plan's assessment concluded that, although she probably suffered from multiple sclerosis, she had never suffered an attack nor exhibited clinical signs. Love appealed the determination. She supported her appeal with several medical reports concluding that she had limited functional ability. The Plan denied her appeal, citing its doctor's conclusion that Love was able to do certain simple jobs. Love sued the Plan under ERISA. The district court granted summary judgment to the Plan. Love appeals.
Exelon Corporation created a defined-benefit pension plan in 2002. In order to be able to distribute the balance of employee's account as if the Plan were a defined-contribution plan, Exelon defined "normal retirement age" to be five years after commencement of employment. Exelon was thus able to avoid what it considered to be a problem with ERISA's treatment of defined-benefit plans (Congress fixed the problem in ERISA in 2006). Thomas Fry retired from Exelon in 2003 at age 55. Fry sued the Plan when it turned over only his account balance rather than his balance plus investment credits through age 65. The lower court held that the Plan satisfied ERISA. Fry appeals.