ERISA and Life Insurance News

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January

2015

ERISA & LIFE INSURANCE NEWS Cover ing ERISA and Life, Health and Disability Insurance Litigation

Dudenhoeffer and Stock Drop Cases:

INSIDE THIS ISSUE Denial of STD Claim Upheld, Based on Failure to Provide Objective Medical Evidence

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Employer Which Prevented Timely Conversion of Life Policy Properly Sued as Fiduciary for Surcharge under § 1132(a)(3)

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Right of Reimbursement Provision Found Only in SPD Enforceable if Not in Conflict with Other Plan Documents

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ERISA Derivative Action is Subject to Arbitration Under Hospital’s Provider Services Agreement

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Extrinsic Evidence Used to Construe Unambiguous Plan Term; Insurer Not Liable for Breach of Fiduciary Duty

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ERISA Cause of Action Accrues when Participant Has Reason to Know that Claim Has Been Denied

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To Avoid Liability, Fiduciary Must Show that Prudent Fiduciary Would Have Made the Same Decision

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Failure to Sue Within Contractual Limitations Period Bars Action to Recover LTD Benefits

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Claims for STD and LTD Benefits Barred by Contractual and Statutory Limitations Periods

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Between the Devil and the Deep Blue Sea

The Supreme Court this year upended nearly 20 years of lower court jurisprudence by unanimously rejecting the so-called Moench Presumption, a judicial creation which provided some protection to fiduciaries of employee stock ownership plans in stock drop cases. Fifth Third Bancorp v. Dudenhoeffer, 134 S. Ct. 2450 (June 25, 2014). In the course of its decision, the Court made clear that plan language cannot trump fiduciary obligations imposed by ERISA. At the same time, the Court equally made clear that drafting allegations in stock drop cases sufficient to avoid dismissal under Iqbal and Twombly standards would be no simple task. The Moench Presumption Employee stock ownership plans, or ESOPs, are intended to encourage employee ownership through investment in employer securities. In furtherance of that goal, Congress created a qualified exemption from the prudence requirement imposed on fiduciaries of ESOPs, which provides that the diversification requirement and the continued on page 2 >>


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