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Seventh Circuit Holds ERISA Venue Selection Provision is Enforceable

March 26, 2018

Authors

Bard Brockman

Seventh Circuit Holds ERISA Venue Selection Provision is Enforceable

March 26, 2018

by: Bard Brockman

On August 10, 2017, in In re Mathias, the United States Court of Appeals for the Seventh Circuit held ERISA Section 502(e)(2) venue provisions do not invalidate a forum-selection clause contained in plan documents, in a 2-1 split decision.

Case Background

George Mathias sued his employer Caterpillar and its ERISA-governed health plan in the United States District Court for the Eastern District of Pennsylvania, where he resided. The plan documents, however, required any suit to be brought in federal court in the Central District of Illinois, so Caterpillar moved to transfer the case.  Mathias opposed the motion, arguing that ERISA’s venue provision invalidated the plan’s forum-selection clause.  His argument was rejected and Caterpillar’s motion to transfer the case was granted in a decision relying on a Sixth Circuit decision in Smith v. Aegon Cos. Pension Plan, which held that forum-selection clauses in ERISA plans are enforceable and

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Seventh Circuit Holds that ERISA does not Preempt State “Slayer Statute”

February 9, 2018

Authors

Meredith Jacobowitz, Jennifer Stokes and Jeffrey Russell

Seventh Circuit Holds that ERISA does not Preempt State “Slayer Statute”

February 9, 2018

by: Meredith Jacobowitz, Jennifer Stokes and Jeffrey Russell

We turn once again to the sad and difficult task that plan administrators face when distributing the benefits of a participant who has been murdered by his or her designated beneficiary. Sad for obvious reasons.  Difficult because ERISA and state law may provide different answers.  ERISA directs a plan to honor a participant’s beneficiary designation—meaning that the murderer would receive the benefit. “Slayer statutes” prohibit the murderer from receiving a financial benefit from his or her victim, requiring the plan to disregard the beneficiary designation.

Our prior blog post suggested three strategies that a plan administrator might employ in the face of uncertainty: interpleader, receipt and refunding agreement, and affidavit of status.  Under the interpleader approach, the plan administrator would pay the benefit into the registry of the court and join each potential claimant as a party defendant. Each claimant would then argue for receipt of the

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Notre Dame Contraceptive Challenge is “Fast-Tracked” in the Seventh Circuit

January 24, 2014

Authors

benefitsbclp

Notre Dame Contraceptive Challenge is “Fast-Tracked” in the Seventh Circuit

January 24, 2014

by: benefitsbclp

The University of Notre Dame, a Catholic higher education institution, challenged ACA’s provision that, as the University describes, requires coverage of certain “abortion-inducing drugs, contraceptives and sterilization procedures, which are contrary to Catholic teaching” in May of 2012.  The University’s original lawsuit was dismissed by a judge in the Northern District of Indiana in December of 2012 for lack of standing.  In its opinion, the district court found that, at that time, the HHS’s regulatory requirement was not sufficiently final to be ripe for review because the government indicated that the regulations would be modified and provide a safe harbor for Notre Dame to protect it from the then-existing regulation.

Given the issuance of the revised guidance in 2013, which provided for the so-called “accommodation” for religious not-for-profit organizations that are not churches and that self-certify their objections to providing the coverage (by shifting the obligation to provide such coverage

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Seventh Circuit Reverses Kraft SJ in 401(k) Fee Case

September 1, 2011

Authors

benefitsbclp

Seventh Circuit Reverses Kraft SJ in 401(k) Fee Case

September 1, 2011

by: benefitsbclp

Earlier this year, a split Seventh Circuit panel reversed, in part, summary judgment previously granted in favor of Kraft Foods Global, Inc. (“Kraft”) in a class action ERISA breach of fiduciary duty case involving “excessive fees” claims in connection with Kraft’s 401(k) plan. The majority opinion was authored by Judge Adelman, an Eastern District of Wisconsin judge sitting by designation in the Seventh Circuit, and was joined by Judge Rovner.

This entry provides a high-level summary of the issues reversed by the court:

  • The Company Stock Fund Issue:  In 2003, Kraft’s then-parent company, Altria Group, Inc. (formerly Philip Morris), made the decision to move the company stock fund in its 401(k) plan from the unitized stock fund (which generally employs a cash buffer) model to “real time” trading where each participant owned shares of the relevant stock rather than units of a fund that invested in the
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Seventh Circuit Overturns Dismissal of Collusive Trading Action Brought By AnchorBank

August 24, 2011

Authors

benefitsbclp

Seventh Circuit Overturns Dismissal of Collusive Trading Action Brought By AnchorBank

August 24, 2011

by: benefitsbclp

Last Friday, the Seventh Circuit issued an opinion overturning the lower court’s dismissal of a lawsuit brought against Hofer, an employee of AnchorBank, alleging  that, along with two other employees, Hofer engaged in a collusive trading scheme in violation of Sections 9(a) and 10(b) of the Securities Exchange Act of 1934 (“1934 Act”).  The two other employees settled with AnchorBank before the lawsuit was filed.

In its second amended complaint, AnchorBank alleged that Hofer and his two co-conspirators coordinated their purchase and sale of units in the AnchorBank Unitized Fund (“Fund”), which was an investment option in the AnchorBank 401(k) plan that held cash and company stock.  The alleged scheme involved the coordination of the sale of Fund units, triggering a payout from the Fund’s cash reserves to the suspected co-conspirators.  Since the trustee was required to maintain a particular cash-to-stock ratio in the Fund, it was then forced to

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